Karachi, February 13, 2025 — The Pakistani rupee held its ground against the US dollar in the interbank market on Thursday, closing at PKR 279.26 per dollar, showing no change from the previous day’s closing rate. This consistency in the rupee’s value highlights the market’s stability, despite ongoing pressures from rising demand for imports and external market factors.
The steady performance of the rupee comes at a time when demand for dollars has been on the rise, particularly due to increasing import activity. According to the latest data from the Pakistan Bureau of Statistics (PBS), import payments surged by 10% in January 2025, reaching $5.23 billion compared to $4.76 billion during the same month last year. Typically, a spike in import-related dollar demand would put downward pressure on the local currency. However, despite this surge, the rupee has managed to maintain its value, reflecting a balanced interplay of supply and demand in the foreign exchange market.
Currency market experts have noted that the rupee’s resilience is primarily supported by sustained foreign exchange inflows, particularly from workers’ remittances. A major factor contributing to the rupee’s stability has been the remarkable rise in remittance inflows. The State Bank of Pakistan (SBP) reported a significant 32% increase in remittances during the first seven months of the fiscal year 2024-25, amounting to billions of dollars in foreign currency. This surge in remittances has provided much-needed support to the country’s foreign exchange reserves, helping to buffer the rupee from potential volatility caused by import-related pressures.
The impact of remittances on the currency market has been profound, and analysts are optimistic about the outlook for the rupee in the coming weeks. The steady inflow of remittances, alongside strong export performance, has helped maintain the balance in the foreign exchange market. In fact, Pakistan’s export sector has been performing strongly, with exports rising by 10% during the first seven months of FY 2024-25. Exports totaled $19.55 billion, up from $17.78 billion during the same period the previous year. This growth in exports not only helps reduce the trade deficit but also provides further support for the rupee’s value, ensuring a stable outlook for the currency.
Furthermore, the country’s foreign exchange reserves have also shown improvement, providing additional stability to the rupee. The SBP reported an increase of $46 million in reserves for the week ending January 31, 2025, bringing the total reserves to $11.418 billion. The higher reserves enhance the central bank’s capacity to manage liquidity, thereby reinforcing the rupee’s position against external economic shocks. This upward trend in reserves underscores the overall improvement in Pakistan’s financial position, which contributes positively to the stability of its currency.
Looking forward, experts remain cautiously optimistic about the rupee’s future trajectory. As long as remittance inflows remain strong and export growth continues, the rupee is expected to remain relatively stable in the near term. Although there may be short-term fluctuations due to import-related demand for dollars, the combination of higher reserves, robust remittance inflows, and strong export performance are likely to help maintain the rupee’s steadiness.
In conclusion, while the Pakistani rupee faces occasional pressures from rising import activity, its overall stability remains intact, thanks to strong remittance inflows, an improving export sector, and growing foreign exchange reserves. If these positive trends continue, Pakistan’s currency is expected to remain resilient, even amidst challenges posed by global economic conditions.