Karachi, March 7, 2025 – The Pakistani rupee experienced a decline against the US dollar on Friday, losing 15 paisas in the interbank market due to heightened import payment pressures and diminishing foreign exchange reserves.
The rupee closed at PKR 279.97 per dollar, compared to the previous day’s closing rate of PKR 279.82.
Currency analysts attributed the rupee’s depreciation to strong demand for the dollar in settling import payments. Additionally, a continuous decline in Pakistan’s foreign exchange reserves further strained the rupee, limiting its strength against the dollar.
According to official data, Pakistan’s total foreign exchange reserves fell by $52 million during the past week. As of February 28, 2025, the country’s reserves stood at $15.874 billion, down from $15.926 billion recorded on February 21, 2025. While the reserves held by the State Bank of Pakistan (SBP) increased marginally by $27 million to reach $11.25 billion, those maintained by commercial banks suffered a significant drop of $79 million, declining to $4.624 billion from $4.703 billion.
The rupee-dollar exchange rate is also influenced by Pakistan’s current account balance. In the first seven months of the fiscal year 2024-25 (July–January), Pakistan recorded a cumulative current account surplus of $682 million. However, a deficit of $420 million in January 2025 alone, exceeding the $404 million deficit recorded in January 2024, has intensified pressure on the rupee against the dollar. The widening deficit is primarily driven by rising imports, which continue to challenge the rupee’s stability.
Despite these concerns, some economic indicators offer hope for rupee stabilization. A 32% increase in remittances during the first seven months of the fiscal year has bolstered foreign exchange reserves, providing some support to the rupee-dollar exchange rate. Additionally, a 10% rise in exports, reaching $19.55 billion, has helped narrow the trade deficit, alleviating some pressure on the rupee.
Market analysts predict that the rupee’s trajectory in the coming weeks will remain closely linked to global oil price trends and external financial inflows. If remittance inflows continue to grow and export performance improves further, the rupee could find some relief against the dollar. However, the risk of rising import costs and global economic uncertainty may continue to weigh on the rupee’s value in the near term.