Karachi, March 25, 2025 – The Pakistani rupee continued its downward trend against the US dollar in the interbank foreign exchange market on Tuesday, primarily due to the increasing pressure of foreign payments.
The rupee depreciated further, closing at PKR 280.42 per US dollar, compared to the previous day’s closing of PKR 280.37.
Currency market analysts attributed this decline in the rupee to a growing demand for the US dollar, as businesses and importers rushed to secure foreign currency to fulfill their international payment obligations. The consistent outflow of dollars from the local market exerted pressure on the rupee, limiting its ability to stabilize against the greenback. This trend has raised concerns among investors and financial experts about the rupee’s short-term outlook.
Despite this depreciation, a surge in remittance inflows from overseas Pakistanis ahead of Eid provided some temporary relief to the rupee. These inflows, fueled by expatriates sending money to their families for holiday expenses, helped counterbalance the increased demand for dollars. However, experts caution that this support may be short-lived, as remittance inflows typically decline following the festive period, leaving the rupee vulnerable to further depreciation.
While Pakistan’s foreign exchange reserves have seen a recent uptick, they have not been sufficient to reverse the rupee’s downward trajectory. According to the latest data released by the State Bank of Pakistan (SBP), total liquid foreign exchange reserves increased by $187 million over the past week. As of March 14, 2025, reserves stood at $16.016 billion, up from $15.929 billion a week earlier. The SBP’s own reserves also showed an increase of $49 million, reaching $11.147 billion. However, these gains have not been enough to offset concerns regarding the rupee’s stability amid persistent dollar outflows.
Looking ahead, financial experts anticipate continued fluctuations in the rupee’s value, particularly after Eid, when import bills and external debt repayments become due. The widening current account deficit and the country’s reliance on foreign currency for trade and debt obligations may add further pressure on the rupee. Without proactive measures from policymakers—such as curbing unnecessary imports or attracting more foreign investments—the rupee is likely to remain under strain in the coming weeks.
To ensure stability, financial authorities must closely monitor forex market trends and implement effective strategies to manage dollar outflows. Given the ongoing economic challenges, maintaining the rupee’s stability will require a careful balance of policy interventions and market confidence.