Karachi, March 17, 2025 – The Pakistani rupee appreciated slightly against the US dollar on Monday, gaining 5 paisas due to a surge in remittance inflows ahead of the Eid festival.
The rupee closed at PKR 280.17 per dollar, improving from Friday’s closing rate of PKR 280.22 in the interbank market.
Remittance Inflows Provide Support to Rupee
Currency market experts attributed the rupee’s modest strength to an increase in dollar inflows from overseas Pakistanis sending money home for Eid preparations. Historically, remittances tend to rise during festive seasons, easing pressure on the rupee in the foreign exchange market.
Despite this temporary relief, analysts cautioned that the rupee remains under pressure due to Pakistan’s ongoing economic challenges. The country’s foreign exchange reserves have been declining, and rising import payments continue to weigh on the local currency.
Declining Foreign Reserves Raise Concerns for Rupee Stability
According to data from the State Bank of Pakistan (SBP), official foreign exchange reserves fell by $152 million over the past week. As of March 7, 2025, reserves stood at $11.098 billion, down from $11.250 billion recorded on February 28, 2025. The depletion of reserves raises concerns about the rupee’s stability, especially as Pakistan faces mounting external debt repayments.
Experts also pointed out that fluctuations in remittances, coupled with a high import bill, contribute to continued uncertainty in the currency market. The rupee could face renewed pressure if these factors persist in the coming weeks.
Future Outlook for the Rupee
Despite ongoing challenges, analysts identified some positive trends that could help the rupee maintain stability. Workers’ remittances remained strong, recording a 32.5% increase in the first eight months (July–February) of FY25, reaching $24 billion, compared to $18.1 billion in the same period last year.
In February 2025, remittances reached $3.1 billion, marking a 38.6% year-on-year increase. These inflows provide crucial support to the rupee and foreign exchange reserves.
However, market observers warn that the rupee’s future trajectory will depend on key fiscal and monetary policies aimed at stabilizing reserves, controlling the trade deficit, and managing external liabilities.