Karachi, July 7, 2025 – The Pakistani rupee faced a significant setback on Monday, weakening to PKR 284.22 against the US dollar at the close of interbank trading.
This marks a sharp drop of 25 paisas from last Friday’s closing rate of PKR 283.97.
Currency dealers and market analysts attributed the rupee’s slide to a renewed spike in dollar demand, primarily driven by import and corporate payment requirements. As the new fiscal year has kicked off, businesses are ramping up international transactions, fueling higher dollar demand in the interbank foreign exchange market.
Importers, many of whom delayed purchases in June pending the federal budget announcement, have now resumed activity. With budgetary clarity in place, the sudden influx of orders has intensified the pressure on the rupee. Meanwhile, multinational companies are actively buying dollars to repatriate profits and dividends abroad, further draining foreign currency liquidity.
Experts warn that the rupee may remain under pressure in the near term as both public and private sectors fulfill backlogged international obligations. However, they also note that this decline is part of a typical post-budget adjustment cycle rather than a sign of long-term economic instability.
Despite the currency’s short-term volatility, macroeconomic indicators offer a more positive outlook. The Pakistan Bureau of Statistics (PBS) reported a 9.47% reduction in the trade deficit for June 2025 compared to May, driven by a 4.79% fall in exports and a 7.08% drop in imports. These figures suggest lower trade volumes but an improving balance.
More significantly, the State Bank of Pakistan (SBP) announced a notable rise in its foreign exchange reserves. By the end of FY 2024–25, SBP’s reserves surged to $14.51 billion, up from $9.39 billion last year—a $5.12 billion increase. This uptick reflects stronger fiscal management, successful debt negotiations, and a stabilizing external environment.
While the rupee continues to feel pressure from elevated dollar demand, the substantial growth in reserves is expected to cushion future shocks. Market watchers believe that as the seasonal demand tapers off, the rupee-dollar exchange rate could see gradual stabilization, supported by improving fundamentals.