Karachi, April 27, 2025 – The Pakistani rupee is anticipated to face notable fluctuation in the interbank foreign exchange market during the upcoming week, influenced by the evolving geopolitical landscape and global trade uncertainties.
Recent data show that the rupee experienced mild fluctuation last week. On Monday, the rupee closed at 280.86 against the US dollar, slipped to 281.07 by Thursday, and slightly recovered to 280.97 on Friday. Despite these minor shifts, analysts expect more pronounced rupee fluctuation in the days ahead.
A report by Fitch Ratings has forecasted a gradual depreciation of the rupee, predicting it could fall to 285 per dollar by June 2025 and further slide to 295 by June 2026. The agency believes that as Pakistan’s economy picks up pace, current account pressures will increase, prompting the State Bank of Pakistan to allow a slow and steady rupee adjustment. This controlled rupee fluctuation is seen as a strategy to manage external sector vulnerabilities more effectively.
Financial terminal Tresmark also highlighted that the rupee’s fluctuation has intensified recently, breaking a 15-month streak of relative stability. Notably, the rupee’s weakening comes despite a decline in the global dollar index by nearly 10 percent. According to Tresmark’s analysis, this is not a random fluctuation but part of broader economic dynamics, including rare current account surpluses and record remittance inflows.
Moreover, market experts point out that the volatility in the rupee-dollar exchange rate stems from broader market fluctuations, particularly following the recent tariff-related announcements by former US President Trump. They emphasize that the rupee’s weakness is not just about falling forex reserves—which dropped by $367 million to $10.21 billion as of April 18—but also about global trade redirection risks.
Analysts warn that if Chinese exports face barriers in the US and instead flood European markets, Pakistan’s exports to Europe could suffer, leading to further rupee fluctuation.
Historical patterns show that rupee collapses were often linked to rampant smuggling, unofficial money transfer systems like hundi/hawala, and soaring current account deficits. However, this time, the rupee’s fluctuation seems to be part of a managed strategy aimed at helping Pakistan weather a difficult global economic environment.
If executed carefully, this gradual rupee fluctuation could stabilize the economy while navigating the challenges ahead.