Karachi, July 16, 2025 – The Pakistani rupee witnessed a sharp decline on Wednesday, slipping to PKR 285 against the US dollar in the interbank market.
This represents a depreciation of 29 paisas to PKR 284.96 compared to Tuesday’s closing rate of PKR 284.67, highlighting renewed pressure on the local currency amid rising demand for foreign exchange.
Currency analysts attributed the rupee’s decline to a surge in demand for the US dollar, driven primarily by import and corporate payments following the commencement of the new fiscal year. These recurring outflows have kept the Pakistani rupee under sustained stress, despite a backdrop of improving macroeconomic indicators.
Interestingly, the depreciation came at a time when Pakistan’s foreign exchange reserves have significantly strengthened. According to the State Bank of Pakistan (SBP), the country’s reserves surged past the $20 billion mark for the first time since March 2022. As of July 4, 2025, reserves stood at $20.029 billion, marking a robust weekly increase of $1.938 billion. This rise was supported by inflows from multilateral institutions and higher remittance volumes.
Remittances from overseas Pakistanis continue to act as a buffer for the rupee, with the fiscal year 2024–25 recording an all-time high of $38.3 billion—a 26.6% increase from the previous year. These strong inflows have helped mitigate some of the pressure on the Pakistani rupee, even as external obligations grow.
Trade data also provided a positive signal. The Pakistan Bureau of Statistics (PBS) reported a 9.47% reduction in the trade deficit for June 2025, reflecting better export performance and more controlled import volumes. This narrowing trade gap offers some relief and improves the outlook for the rupee in the medium term.
Despite these encouraging indicators, experts remain cautious. They warn that without effective management of dollar demand, the Pakistani rupee may continue to face short-term volatility. However, the broader sentiment in the foreign exchange market remains cautiously optimistic, as strong fundamentals gradually reinforce confidence in the national currency’s stability and potential recovery path.