Karachi, December 17, 2024 – The Pakistani rupee weakened by 10 paisas on Tuesday, driven by increased dollar demand for import and corporate payments. The rupee closed at PKR 278.27 against the dollar in the interbank foreign exchange market, slightly down from the previous day’s closing of PKR 278.17.
Currency analysts attributed this depreciation to heightened demand for the dollar as businesses settle their import and corporate dues ahead of the quarter ending December 31, 2024. Despite this dip, experts maintained a positive outlook for the rupee, citing improvements in key economic indicators.
Stability in the rupee’s performance has been bolstered by a slight increase in Pakistan’s foreign exchange reserves. The State Bank of Pakistan (SBP) recently reported a $13 million rise in reserves, bringing the total to $12.051 billion for the week ending December 6, 2024. This modest increase, up from $12.038 billion the previous week, signals growing confidence in the country’s currency market.
Another critical factor underpinning the rupee’s resilience is the substantial growth in remittances from overseas Pakistanis. During the first five months of the current fiscal year (July–November 2024-25), home remittances surged by 34% year-on-year, reaching $14.77 billion compared to $11.05 billion in the same period last year. These remittance inflows have provided vital foreign exchange liquidity, stabilizing the currency and easing external financial pressures.
Looking forward, analysts remain cautiously optimistic about the rupee’s near-term trajectory. Government measures to limit non-essential imports, coupled with robust remittance flows, have alleviated some pressure on the balance of payments, lending temporary support to the rupee. However, they warn that achieving sustainable currency stability will require more comprehensive economic reforms.
Such reforms should prioritize enhancing industrial productivity, diversifying export markets, and reducing reliance on short-term external borrowing. By addressing these structural challenges, Pakistan can lay the groundwork for a more resilient economy and a stable currency in the long run.