Karachi, May 14, 2025 – The Pakistani rupee witnessed a marginal decline against the US dollar on Wednesday, slipping by five paisas in the interbank foreign exchange market.
This minor depreciation came despite the receipt of significant inflows from the International Monetary Fund (IMF), raising concerns about the rupee’s short-term stability.
According to data released by the State Bank of Pakistan (SBP), the rupee closed at PKR 281.72 against the dollar, compared to the previous day’s closing of PKR 281.67. Currency market experts attributed the decline in the value of the Pakistani rupee to increased dollar demand, particularly from importers and corporations settling payments.
The pressure on the rupee intensified following the recent ceasefire between Pakistan and India, which has led to a surge in trade-related activities. As a result, the demand for imported raw materials has risen, pushing up the need for dollars and putting strain on the local currency. Analysts believe this heightened demand, although a sign of economic momentum, has contributed to the rupee’s slight drop.
Of particular note is the fact that the rupee’s weakness occurred despite the SBP receiving a $1.023 billion tranche from the IMF under the Extended Fund Facility (EFF). This inflow was expected to bolster foreign exchange reserves and ease pressure on the Pakistani rupee.
However, analysts remain cautiously optimistic. They point out that while the IMF funding provides a critical financial cushion, sustainable support for the rupee will require continued inflows from exports and workers’ remittances. These sources are essential to counterbalance persistent dollar demand.
Looking ahead, financial experts stress the importance of managing the country’s import bill and maintaining discipline in dollar outflows. If unchecked, continued high demand for the dollar could overshadow the benefits of foreign inflows, keeping the rupee under pressure.
In summary, the Pakistani rupee’s marginal slip underscores the fragile balance in the currency market. Though IMF support offers temporary relief, long-term rupee stability hinges on strategic economic management, reduced reliance on imports, and boosting dollar-generating sectors.