Karachi, February 27, 2025 – The Pakistani rupee continued its downward trajectory on Thursday, depreciating by 10 paisas against the US dollar to settle at PKR 279.72 in the interbank foreign exchange market.
This slight decline followed Wednesday’s closing rate of PKR 279.62 per dollar.
Currency analysts attributed the rupee’s weakening to heightened demand for the dollar as businesses and importers made payments ahead of Ramadan. The holy month is set to commence in Pakistan on either Saturday, March 1, or Sunday, March 2, and the upcoming bank closures for Zakat deduction further influenced market activity. Experts highlighted that corporate transactions and import settlements created fluctuations in the rupee-dollar exchange rate, adding short-term pressure on the local currency.
Despite the recent dip, financial experts remain optimistic about the rupee’s overall stability in the coming weeks. Strengthening foreign exchange reserves, steady remittance inflows, and robust export performance are expected to provide crucial support to the rupee-dollar parity. The rupee has shown resilience in recent weeks, buoyed by a combination of rising export earnings and consistent remittance transfers from overseas Pakistanis.
According to data from the State Bank of Pakistan (SBP), the nation’s total foreign exchange reserves witnessed an increase of $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 recorded an increase of $35 million, reaching $11.202 billion. This rise in reserves plays a critical role in stabilizing the rupee-dollar exchange rate and mitigating excessive market volatility.
Another significant factor impacting the rupee’s movement is Pakistan’s current account balance. During the first seven months of FY2024-25 (July–January), the country posted a cumulative surplus of $682 million. However, January 2025 saw a current account deficit of $420 million, up from the $404 million recorded in January 2024. This widening deficit, driven primarily by higher import payments, has placed additional pressure on the rupee against the dollar.
Nevertheless, certain economic indicators suggest continued stability for the rupee. A notable 32% increase in remittances during the first seven months of the fiscal year has helped bolster foreign exchange reserves, supporting the rupee-dollar exchange rate. Additionally, a 10% rise in exports, reaching $19.55 billion, has contributed to narrowing the trade deficit, further reinforcing the rupee’s position in the foreign exchange market. If these positive trends persist, the rupee is likely to maintain a stable trajectory against the dollar in the coming months.