Karachi, February 28, 2025 – The Pakistani rupee registered a modest gain against the US dollar on Friday, appreciating by five paisas despite ongoing foreign payment pressures.
The rupee concluded the trading session at PKR 279.67 per dollar, improving slightly from the previous day’s closing rate of PKR 279.72 in the interbank foreign exchange market.
Currency analysts attributed the rupee’s appreciation to increased inflows stemming from Ramadan-related remittances and export receipts. These financial inflows provided the rupee with much-needed support against the dollar. However, rising import-related payments continued to exert downward pressure on the rupee, limiting its overall appreciation. Analysts remain cautiously optimistic that further inflows in the coming weeks could help stabilize the rupee-dollar exchange rate.
The latest data from the State Bank of Pakistan (SBP) revealed that the country’s foreign exchange reserves witnessed a decline of $23 million in the past week. As of February 21, 2025, Pakistan’s total net foreign exchange reserves stood at $15.925 billion, down from $15.948 billion recorded on February 14. Despite this overall dip, the SBP’s official reserves increased slightly by $20 million, reaching $11.222 billion compared to $11.202 billion a week earlier. The SBP remains hopeful about further enhancements in reserves, especially in light of successful negotiations with the International Monetary Fund (IMF), which are anticipated to attract additional dollar inflows.
Another crucial factor influencing the rupee’s movement against the dollar is Pakistan’s current account balance. During the first seven months of FY2024-25 (July–January), the country recorded a cumulative current account surplus of $682 million. However, in January 2025 alone, Pakistan posted a current account deficit of $420 million, slightly higher than the $404 million deficit recorded in January 2024. The rising deficit, primarily driven by increasing import payments, has added pressure on the rupee against the dollar.
Despite these challenges, some economic indicators suggest a degree of resilience for the rupee. A significant 32% increase in remittances during the first seven months of the fiscal year has bolstered foreign exchange reserves, offering crucial support to the rupee-dollar exchange rate. Additionally, a 10% rise in exports, totaling $19.55 billion, has helped narrow the trade deficit, further reinforcing the rupee’s standing in the currency market. If these positive trends persist, analysts anticipate that the rupee will maintain a relatively stable trajectory against the dollar in the coming months.