Karachi, December 4, 2024 – The Pakistani rupee depreciated by 5 paisas against the US dollar on Wednesday, closing at PKR 277.92 to the dollar, compared to the previous day’s closing rate of PKR 277.87. This slight decline in the rupee’s value is primarily attributed to increased demand for the dollar, driven by outflows related to import payments and corporate obligations.
Currency analysts explained that the rise in demand for dollars was linked to higher import costs and corporate payments. As the economy shows signs of accelerating activity, the demand for imported raw materials has increased. This trend is further fueled by a steady recovery in key sectors, prompting businesses to make larger foreign payments.
Despite this short-term weakening of the rupee, experts are optimistic about the outlook for the currency in the coming days. They point to several macroeconomic improvements, which are expected to support the rupee’s stability. These include an uptick in remittance inflows and government efforts to curb non-essential imports, both of which have contributed to a more stable balance of payments. According to analysts, the combination of these positive factors suggests that the rupee may not face significant downward pressure in the near future.
However, experts caution that these improvements, while encouraging, should not lead to complacency. They stress the importance of implementing structural reforms to ensure long-term stability. Key areas for reform include enhancing industrial production, diversifying the economy, and reducing reliance on short-term external debt. These measures are seen as crucial for strengthening Pakistan’s economic foundations and boosting its global competitiveness.
Additionally, experts emphasize the need for sustainable fiscal policies and structural adjustments that promote export-driven growth. Addressing underlying issues such as fiscal deficits, limited industrial capacity, and weak governance systems will be essential to protecting the economy from future vulnerabilities and ensuring a resilient, competitive economy.