Karachi, June 1, 2025 – The Pakistani rupee is likely to maintain its current stability against the US dollar in the days leading up to the presentation of the Budget 2025-26, which is scheduled for June 10.
Market participants anticipate a calm foreign exchange environment, aided by upcoming inflows tied to Eid-ul-Adha, expected to fall on June 7.
In the interbank market, the rupee showed resilience throughout the past week. It opened Monday at 282.06 per dollar, dipped slightly to 282.17 on Tuesday, and rebounded to close at 282.02 on Friday. This performance has given traders hope that the rupee will continue to trade within a narrow band in the run-up to the budget.
According to a weekly outlook from Tresmark, a financial analytics platform, the rupee is expected to hover around the 282 mark against the dollar in the coming week. “With payment pressures easing, the rupee held its range last week,” Tresmark stated. “While speculative talk about rupee depreciation persists, there’s no strong economic basis for such fears, especially with open market rates also showing signs of stability,” it added.
One of the key factors supporting the rupee is the rise in remittance inflows ahead of Eid, as overseas Pakistanis send money home. This seasonal boost in foreign currency supply has improved dollar availability in the market. Additionally, the State Bank of Pakistan’s (SBP) foreign exchange reserves continue to trend upward, lending further strength to the rupee.
As of May 23, the SBP’s reserves increased by $70 million to reach $11.516 billion, even though the country’s total liquid reserves saw a slight drop due to lower commercial bank holdings. These reserves have been reinforced by inflows from the International Monetary Fund (IMF) and support from allied nations. The SBP recently received a $1.023 billion tranche from the IMF as part of the ongoing $7 billion loan programme.
The rupee has also benefited from SBP’s active market participation. From June 2024 to February 2025, the SBP purchased $5.9 billion from the interbank market to support external debt repayments and stabilize reserves.
Looking ahead, interest rate cuts may further shape the economic landscape post-budget. With the rupee holding steady and inflation expectations moderate, markets are factoring in the possibility of another 100 basis points rate cut during the SBP’s next monetary policy meeting on June 16.
Despite minor vulnerabilities in the external sector, the overall sentiment remains cautiously optimistic that the rupee will remain stable, at least until the budget is announced.