Karachi, March 11, 2025 – The Pakistani rupee showed resilience on Tuesday as it appreciated against the US dollar, gaining 12 paisa in the interbank market.
The rupee closed at PKR 279.95 per dollar, improving from the previous day’s exchange rate of PKR 280.07. This positive movement in the rupee’s value was largely attributed to a robust surge in workers’ remittances, which significantly bolstered foreign exchange inflows.
According to the State Bank of Pakistan (SBP), workers’ remittances witnessed a substantial rise of 32.5% during the first eight months (July–February) of the fiscal year 2024-25. The total remittances amounted to an impressive $24 billion, a sharp increase from the $18.1 billion recorded during the same period in FY24. The month of February 2025 alone saw an inflow of $3.1 billion, marking a remarkable 38.6% year-on-year (YoY) increase compared to February 2024. On a month-on-month (MoM) basis, remittances saw a 3.8% increase from January 2025, further strengthening the rupee’s position in the interbank market.
Despite this positive development, currency analysts cautioned that the rupee’s stability remains vulnerable due to rising demand for import payments and declining foreign exchange reserves. As trade resumed after the weekend, the rupee faced initial pressure due to heightened dollar demand from importers and corporate entities settling payments at the start of the week. This trend often exerts downward pressure on the rupee, affecting its ability to maintain stability.
Official data revealed that Pakistan’s total foreign exchange reserves declined by $52 million over the past week, signaling continued external account challenges. As of February 28, 2025, the country’s total reserves stood at $15.874 billion, down from $15.926 billion recorded on February 21, 2025. While SBP-held reserves increased slightly by $27 million to reach $11.25 billion, commercial banks saw a sharp decline of $79 million, reducing their reserves to $4.624 billion. The fall in reserves has raised concerns about the rupee’s trajectory in the coming weeks.
The rupee’s performance remains closely tied to Pakistan’s broader economic indicators. During the first seven months of FY25 (July–January), Pakistan maintained a cumulative current account surplus of $682 million. However, January 2025 recorded a deficit of $420 million, compared to $404 million in January 2024. This growing deficit has placed additional depreciation pressure on the rupee, with rising import costs posing a persistent challenge. As economic conditions evolve, market participants will be closely monitoring the rupee’s movement against the dollar amid ongoing fiscal and monetary developments.