Karachi, December 21, 2025 — The Pakistani rupee is expected to remain largely stable against the US dollar in the coming week, supported by steady dollar inflows from exporters and a continued improvement in the country’s foreign exchange reserves, currency market participants said.
In the interbank market, the rupee ended the week at 280.25 per dollar, compared to 280.31 at the start of the week, registering a marginal 0.02 percent appreciation. Dealers anticipate the local currency may gain 5 to 10 paisas in the near term, barring any unexpected external shocks.
Market sentiment has been strengthened by improving balance of payments indicators. Pakistan posted a current account surplus of $100 million in November, a sharp turnaround from a $291 million deficit in October. However, for the first five months of fiscal year 2026, the country still recorded a current account deficit of $812 million, compared to a $503 million surplus in the same period last year.
Foreign exchange reserves have also provided a key cushion. Pakistan’s liquid FX reserves rose by $1.477 billion to $21.089 billion as of December 12, following a $1.2 billion inflow from the International Monetary Fund under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF). Reserves held by the State Bank of Pakistan increased by $1.3 billion to $15.886 billion.
Analysts at Tresmark noted that while the momentum currently favors the rupee, the pace of appreciation appears to be slowing. They suggested it is unlikely the central bank would allow the currency to decisively breach the 280-per-dollar level, particularly amid weak export performance and soft global demand. However, increased dollar selling by exporters is keeping pressure on the greenback.
The report added that recent current account improvements have been driven mainly by import compression rather than export growth, with remittances continuing to act as the primary external stabilizer. It also highlighted that the real effective exchange rate (REER) has risen to 104.8, above its long-term average, signaling a gradual erosion of export competitiveness.