KARACHI, February 26, 2025 – The Pakistani rupee registered a modest gain of 5 paisas against the US dollar on Wednesday, supported by Ramadan-related foreign inflows. This slight appreciation in the rupee’s value was largely driven by increased remittances from overseas Pakistanis.
At the close of the interbank foreign exchange market, the rupee stood at PKR 279.62 against the dollar, improving from the previous day’s closing rate of PKR 279.67. Market analysts attributed this gain in the rupee’s value to the seasonal uptick in remittances during Ramadan, as expatriates send funds to support their families in Pakistan.
Despite the gain, the rupee faced pressure throughout the trading session due to a surge in demand for the US dollar. Currency experts highlighted that corporate transactions and import payments created fluctuations in the rupee-dollar exchange rate. However, the increased foreign inflows provided support, allowing the rupee to post a slight recovery by the end of the day.
Experts remain optimistic about the rupee’s performance in the near future. They believe the rupee will continue to show stability, backed by improving foreign exchange reserves and a steady flow of remittances. The rupee’s resilience in recent weeks has been evident, aided by rising export earnings and consistent transfers from overseas workers.
According to the State Bank of Pakistan (SBP), the country’s total foreign exchange reserves recently increased by $85 million. As of February 14, 2025, Pakistan’s net forex reserves stood at $15.948 billion, up from $15.863 billion a week earlier. The SBP’s own reserves also saw a rise of $35 million, reaching $11.202 billion. This boost in reserves is an essential factor in stabilizing the rupee-dollar exchange rate and curbing market volatility.
Another key element affecting the rupee’s movement is Pakistan’s current account balance. The country recorded a cumulative surplus of $682 million in the first seven months of FY2024-25 (July–January). However, January 2025 witnessed a current account deficit of $420 million, an increase from the $404 million shortfall recorded in January 2024. This rise in deficit, fueled by higher import payments, exerted pressure on the rupee.
Nonetheless, several indicators suggest stability for the rupee. A 32% surge in remittances during the first seven months of the fiscal year has strengthened foreign exchange reserves, lending vital support to the rupee-dollar exchange rate. Additionally, a 10% increase in exports, reaching $19.55 billion, has contributed to narrowing the trade deficit, further reinforcing the rupee’s standing in the foreign exchange market.