Karachi, May 16, 2025 – The Pakistani rupee ended slightly lower against the US dollar in the interbank foreign exchange market on Friday, closing at PKR 281.66 compared to the previous day’s level of PKR 281.61.
This marginal depreciation of 5 paisas came amid increased demand for dollars to cover import and corporate payment obligations ahead of the weekend.
Currency dealers attributed the downward movement to heightened demand from importers and the corporate sector. They noted that such spikes are common before weekly holidays. Despite Friday’s minor dip, the Pakistani rupee has generally remained stable in recent sessions, supported by healthy inflows and improved macroeconomic indicators.
One of the key factors reinforcing the rupee’s resilience has been Pakistan’s increasing foreign exchange reserves. During the week ending May 9, 2025, reserves rose by $131 million. This uptick occurred even before the receipt of a fresh installment from the International Monetary Fund (IMF). On May 13, the State Bank of Pakistan confirmed it had received the second tranche of SDR 760 million (approximately $1.023 billion) under the IMF’s Extended Fund Facility (EFF). This inflow is expected to further strengthen the Pakistani rupee by easing pressure on the external account.
Another significant development supporting the rupee is the notable turnaround in Pakistan’s current account. For the first ten months (July to April) of the fiscal year 2024–25, Pakistan recorded a current account surplus of $1.88 billion, a stark contrast to the deficit of $1.34 billion during the same period last year. This shift reflects stronger external fundamentals, buoyed by a 31% rise in workers’ remittances—which reached $31.2 billion—and a 6.25% increase in export earnings.
Despite this positive momentum, Pakistan’s trade deficit widened by 8.81% to $21.35 billion, primarily due to a 7.37% increase in imports. While higher imports indicate revived industrial and consumer activity, they continue to challenge the Pakistani rupee by boosting demand for foreign exchange.
Looking forward, policymakers remain optimistic. With continued IMF support, strong remittances, and steady exports, the Pakistani rupee is expected to maintain stability against the US dollar through the remainder of FY25.