Karachi, June 19, 2025 – The Pakistani rupee continued its downward trajectory for the eighth consecutive trading session on Thursday, losing further ground against the US dollar amid intensifying geopolitical tensions and mounting import-related payment pressures following the federal budget announcement.
In the interbank market, the rupee depreciated by 9 paisas to settle at PKR 283.64 per dollar, compared to the previous day’s close of PKR 283.55. Over the course of these eight sessions, the rupee has cumulatively shed PKR 1.47 against the dollar, reflecting persistent demand for the greenback in both domestic and international markets.
Currency market analysts attribute the prolonged weakness of the Pakistani rupee to a combination of external and internal factors. Chief among them is the escalating conflict in the Middle East, particularly between Iran and Israel, which has triggered a surge in global oil prices. As a net oil importer, Pakistan faces an increased demand for dollars to finance energy imports, thereby putting additional strain on the rupee.
Domestically, uncertainty surrounding the fiscal measures outlined in the 2025–26 federal budget has also dampened investor sentiment. Market participants are reportedly cautious about the implications of new tax measures and expenditure plans, contributing to speculative pressure on the rupee-dollar exchange rate.
Despite these headwinds, some positive developments have surfaced. The State Bank of Pakistan (SBP) reported that workers’ remittances rose to $34.9 billion during the first 11 months of FY25 (July–May), marking a robust 28.8% year-on-year growth. Notably, May alone witnessed inflows of $3.7 billion, strengthening the country’s dollar reserves and offering partial relief to the rupee.
Additionally, SBP data showed an increase of $277 million in the nation’s total foreign exchange reserves for the week ending June 6. The reserves now stand at $16.875 billion, with SBP’s own holdings at $11.676 billion. This improvement enhances the central bank’s ability to intervene in the currency market and stabilize the rupee-dollar parity.
While these trends offer some reassurance, analysts remain wary. They emphasize that further depreciation of the Pakistani rupee cannot be ruled out if geopolitical risks persist and global oil prices remain volatile. The rupee’s direction will largely depend on fiscal prudence and international market developments.