KARACHI – May 6, 2025: The Pakistani rupee continued its downward trajectory on Tuesday, losing further ground against the US dollar in the interbank foreign exchange market.
The rupee closed at PKR 281.37 per dollar, reflecting a depreciation of 15 paisas compared to the previous day’s close of PKR 281.22.
This latest slip in the rupee’s value marks another challenging day in the interbank market, where the local currency has been under consistent pressure due to increasing demand for the dollar. Market experts cited declining foreign exchange reserves, a widening trade deficit, and strong demand for the dollar by importers and corporate entities as the primary factors driving the rupee’s depreciation.
According to data released by the State Bank of Pakistan (SBP), the country’s foreign exchange reserves dropped by $184 million during the week ending April 25, 2025. The reserves declined to $15.252 billion from $15.436 billion a week earlier. The weakening of reserves signals persistent external account challenges and inadequate financial inflows, placing additional stress on the rupee in the interbank market.
The rupee’s instability is further compounded by Pakistan’s ballooning trade deficit. The Pakistan Bureau of Statistics (PBS) reported that the trade gap expanded by a staggering 55% in April 2025 compared to the same month last year. The deficit soared to $3.39 billion, up from $2.18 billion in April 2024—marking the steepest monthly trade imbalance in three years. The widening gap has intensified the need for dollar payments, especially for imports, thereby increasing pressure on the rupee.
Despite the current strain in the interbank market, some analysts are cautiously hopeful. They anticipate that upcoming dollar inflows from worker remittances and export receipts could help stabilize the rupee. These inflows are expected to improve the interbank supply of dollars and ease the rupee’s depreciation, at least temporarily.
However, the rupee remains vulnerable to fluctuations in global dollar strength and Pakistan’s macroeconomic weaknesses. Until the country bolsters its reserves and addresses the trade imbalance, the rupee is likely to stay under pressure against the dollar, particularly within the interbank exchange landscape.