Karachi, June 20, 2025 — The Pakistani rupee continued its downward spiral on Friday, closing at PKR 283.70 against the US dollar in the interbank foreign exchange market. This marks the ninth consecutive session of depreciation, with the local currency shedding another six paisas from Thursday’s close of PKR 283.64 per dollar.
The consistent weakening of the rupee has raised concerns among market watchers, who cite a blend of global and domestic challenges weighing on the currency. The intensifying conflict in the Middle East, particularly the ongoing Iran-Israel tensions, has pushed international oil prices higher. As a net importer of petroleum products, Pakistan has been forced to spend more dollars on energy purchases, increasing demand for the greenback and placing fresh pressure on the rupee.
Simultaneously, uncertainty around Pakistan’s fiscal path, especially after the presentation of the federal budget for 2025–26, has kept investors on edge. New taxation measures and government spending plans have raised questions about inflation and growth prospects, prompting cautious behavior in financial markets. This, in turn, has contributed to speculative movements in the rupee-dollar exchange rate.
Despite the mounting headwinds, there are some encouraging signs. The State Bank of Pakistan (SBP) revealed that workers’ remittances reached $34.9 billion during the first 11 months of FY25 (July–May), reflecting a notable 28.8% increase over the previous year. May 2025 alone recorded inflows of $3.7 billion, injecting much-needed dollar liquidity into the economy and helping to cushion the rupee’s slide.
Additionally, the SBP reported that foreign exchange reserves rose by $130 million during the week ending June 13, 2025. This boost enhances the central bank’s capacity to defend the rupee and mitigate sharp fluctuations in the rupee-dollar parity.
While these developments offer a measure of stability, analysts caution that the rupee remains vulnerable. Sustained geopolitical instability and continued volatility in global oil markets could fuel further depreciation. The rupee’s trajectory in the coming weeks will largely hinge on fiscal discipline, investor confidence, and external economic conditions, particularly the availability of the dollar to meet import and debt obligations.