Karachi, March 18, 2025 – The Pakistani rupee weakened against the US dollar on Tuesday, closing 10 paisas lower in the interbank foreign exchange market.
The rupee ended the day at PKR 280.27 per dollar, compared to the previous session’s closing rate of PKR 280.17 per dollar.
Currency market analysts attributed the rupee’s depreciation to a surge in demand for the dollar amid rising import payments. The country’s current account deficit for February also contributed to downward pressure on the rupee, as external obligations increased demand for the dollar in the interbank market.
The ongoing economic challenges have further weighed on the local currency. Analysts warned that the rupee could face additional depreciation if foreign exchange reserves continue to decline. The depletion of reserves makes it difficult for Pakistan to meet external debt repayments, increasing reliance on external funding sources to stabilize the rupee.
According to data from the State Bank of Pakistan (SBP), the country’s official foreign exchange reserves declined by $152 million in the past week. As of March 7, 2025, reserves stood at $11.098 billion, down from $11.250 billion recorded on February 28, 2025. The declining reserves create uncertainty regarding Pakistan’s ability to manage external liabilities and sustain the rupee against the dollar.
Despite the current depreciation, analysts remain hopeful that strong financial inflows could provide some support to the rupee. They believe that continued foreign assistance, remittances, and potential external borrowing may help prevent a sharp decline in the currency’s value against the dollar. However, concerns remain about high import bills and fluctuations in remittance flows, which could create volatility in the market.
If Pakistan secures fresh inflows or manages to curb imports, the rupee could regain stability in the coming weeks. Otherwise, sustained demand for the dollar may lead to further depreciation of the local currency. Policymakers and financial institutions will need to monitor developments closely to ensure the rupee does not face excessive pressure in the near future.