Karachi, May 19, 2025 – The Pakistani rupee witnessed a slight depreciation against the US dollar on Monday, closing lower in the interbank foreign exchange market.
The rupee slipped by 11 paisas to settle at PKR 281.77 per dollar, down from the previous close of PKR 281.66 recorded on Friday.
Currency experts cited increased demand for the US dollar at the start of the trading week—primarily for import and corporate sector payments—as the main reason for the rupee’s decline in the interbank market. They also noted that the upcoming federal budget for FY2025–26 is contributing to pressure on the local currency, as market participants adopt a cautious stance.
Despite this marginal dip, the rupee has maintained relative stability in recent sessions, thanks to robust foreign exchange inflows and improving macroeconomic indicators. Analysts believe the interbank performance of the rupee continues to reflect Pakistan’s enhanced economic management and increased foreign reserves.
A significant boost to the rupee’s strength came from a $1.023 billion inflow received on May 13 as part of the second tranche under the International Monetary Fund’s Extended Fund Facility (EFF). The State Bank of Pakistan confirmed the inflow, which followed a $131 million increase in reserves during the week ending May 9. These developments are expected to reduce pressure on the rupee in the interbank market in the near term.
Furthermore, Pakistan’s external position continues to improve. The country posted a current account surplus of $1.88 billion from July to April of FY2024–25, compared to a deficit of $1.34 billion during the same period last year. This turnaround was fueled by a 31% surge in workers’ remittances, which hit $31.2 billion, and a 6.25% rise in exports.
However, a widening trade deficit of 8.81%—reaching $21.35 billion—due to a 7.37% increase in imports, remains a challenge for the rupee, particularly in the interbank market where demand for foreign exchange remains high.
Looking ahead, market observers remain cautiously optimistic. With continued IMF backing, steady export growth, and resilient remittance inflows, the Pakistani rupee is expected to stay broadly stable in the interbank market throughout the remainder of the fiscal year.