Karachi, November 27, 2024 – The Pakistani rupee slipped by 12 paisas on Wednesday, closing at PKR 277.96 against the US dollar, down from the previous day’s rate of PKR 277.84 in the interbank market. This slight depreciation comes amid a rebound in international oil prices, which continues to exert pressure on Pakistan’s economy.
Currency analysts explained that as a net importer of crude and refined oil products, Pakistan’s economy is highly sensitive to fluctuations in global oil prices. The recent increase in oil prices has directly impacted the rupee, further straining the country’s foreign exchange position. Additionally, improving economic indicators have driven up the demand for industrial raw materials, which has added to the pressure on the rupee.
Despite this decline, analysts are optimistic about the rupee’s medium-term outlook. They pointed out that easing geopolitical tensions in the Middle East could stabilize global markets, providing indirect support for the Pakistani currency. Furthermore, consistent inflows from exports and remittances have played a significant role in offsetting some of the downward pressure.
The State Bank of Pakistan (SBP) recently reported a $29 million increase in foreign exchange reserves for the week ending November 15, 2024, raising reserves to $11.288 billion. Export earnings also contributed to a notable $84 million rise in official reserves, which now stand at $11.257 billion. These developments have instilled confidence in investors, with equity markets showing modest recoveries.
However, experts emphasized the need for long-term structural reforms. Addressing weaknesses in the export sector and reducing reliance on short-term inflows are crucial for sustaining the rupee’s stability. They also stressed diversifying the economy, strengthening the domestic industrial base, and enhancing trade relations to ensure resilience against external shocks.
While remittances and rising reserves offer temporary relief, lasting economic progress will depend on implementing reforms that enhance export-driven industries and foster sustainable growth.
