Karachi, May 12, 2025 – The Pakistani rupee closed stronger against the US dollar on Monday in the interbank foreign exchange market, buoyed by improved investor sentiment following a regional ceasefire and the approval of funding from the International Monetary Fund (IMF).
The rupee appreciated by 14 paisas, ending the trading day at PKR 281.57 per dollar, compared to Friday’s closing rate of PKR 281.71. Currency experts noted that the dollar lost some ground as markets responded positively to the news of a ceasefire, which has reduced geopolitical tension and injected a wave of optimism across financial sectors.
“The announcement of the ceasefire came as a relief after weeks of volatility,” said a senior dealer at a major Karachi bank. “This move reassured both local and international investors, giving the rupee the push it needed against the dollar.”
In addition to the ceasefire, the IMF’s board gave the green light for a $2.4 billion disbursement under the Extended Fund Facility (EFF), further strengthening the rupee’s position. This fresh inflow of foreign currency has boosted confidence in Pakistan’s economic stability and fiscal direction.
Financial analyst Khurram Shehzad, advisor to the finance ministry, remarked that Pakistan is now in a more favorable position to leverage both domestic reforms and international support. “With the IMF’s backing, lower inflation, and a consistent policy direction, the rupee has gained traction against the dollar,” he said. “Investor confidence is returning, and we expect continued support for the rupee if these conditions persist.”
Market watchers also pointed to falling interest rates and improving external accounts as key factors in supporting the rupee’s stability. The dollar’s retreat in the local market reflects a broader sentiment that Pakistan’s economy may be entering a period of relative calm and progress.
With the ceasefire holding and financial inflows improving, the rupee’s gains against the dollar may continue in the short term, provided economic reforms remain on course and regional peace is maintained.