Karachi, March 10, 2025 – The Pakistani rupee experienced a slight decline against the dollar on Monday, closing at PKR 280.07 in the interbank market, down by 10 paisas from last Friday’s rate of PKR 279.97.
This depreciation was primarily driven by increased demand for the dollar, particularly for import and corporate payments.
Currency analysts noted that the rupee faced downward pressure as trading resumed after the weekend. The dollar demand for import settlements and corporate obligations is typically higher on the first trading day of the week, which exerted additional strain on the rupee. Furthermore, concerns over Pakistan’s dwindling foreign exchange reserves have limited the rupee’s ability to hold firm against the dollar.
According to official data, Pakistan’s total foreign exchange reserves saw a decline of $52 million in the past week, reflecting persistent external account pressures. As of February 28, 2025, the country’s total 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) registered a slight increase of $27 million, reaching $11.25 billion, commercial bank reserves fell sharply by $79 million, reducing their holdings to $4.624 billion from $4.703 billion. This decline in reserves has fueled further uncertainty regarding the rupee-dollar exchange rate.
The rupee’s trajectory remains closely tied to Pakistan’s current account balance. During the first seven months of the fiscal year 2024-25 (July–January), Pakistan reported a cumulative current account surplus of $682 million. However, the country recorded a deficit of $420 million in January 2025 alone, compared to $404 million in January 2024. This widening shortfall has intensified depreciation pressures on the rupee against the dollar, with surging imports posing a continuous challenge.
Despite these headwinds, some positive economic indicators provide a glimmer of stability for the rupee-dollar exchange rate. A 32% surge in remittances during the first seven months of the fiscal year has contributed to strengthening foreign exchange reserves, supporting the rupee. Additionally, a 10% increase in exports, which reached $19.55 billion, has helped narrow the trade deficit, offering some resilience to the rupee against the dollar in the face of external challenges.