Karachi, March 14, 2025 – The Pakistani rupee weakened further on Friday, depreciating by 17 paisas against the US dollar, as the country’s foreign exchange reserves continued to decline.
The rupee closed at PKR 280.22 per dollar in the interbank market, compared to the previous day’s closing rate of PKR 280.05.
Currency analysts attributed the depreciation of the rupee to the shrinking foreign exchange reserves of the State Bank of Pakistan (SBP). The central bank reported a drop in reserves, primarily due to ongoing external debt repayments that continue to weigh on Pakistan’s financial position.
According to the SBP, its official reserves fell by $152 million over the past week. As of March 7, 2025, the reserves stood at $11.098 billion, down from $11.250 billion recorded on February 28, 2025. The declining reserves have fueled concerns over the rupee’s stability, as Pakistan grapples with increasing external liabilities.
Market experts also pointed to a surge in dollar demand for imports and corporate payments ahead of the weekend as another reason for the rupee’s decline. Higher import bills and remittance fluctuations have contributed to market uncertainty, keeping the rupee under pressure.
Despite these headwinds, analysts highlighted some positive factors that could offer support to the rupee. Workers’ remittances remained strong, with inflows rising by 32.5% in the first eight months (July–February) of FY25, reaching $24 billion compared to $18.1 billion in the same period last year. February 2025 saw a remittance inflow of $3.1 billion, marking a 38.6% year-on-year increase. These inflows provide some relief to foreign exchange reserves and help stabilize the rupee.
However, experts warned that the rupee remains exposed to fluctuations due to persistent trade deficits, increasing global commodity prices, and declining reserves. The rupee’s future trajectory will largely depend on upcoming fiscal and monetary policy decisions aimed at strengthening reserves and curbing external account pressures.
In the broader economic landscape, Pakistan recorded a current account surplus of $682 million in the first seven months of FY25 (July–January). However, the latest data showed a deficit of $420 million in January 2025, up from $404 million in January 2024. The widening deficit, coupled with weakening reserves, suggests that the rupee may continue to face volatility in the near term. Investors and traders will closely monitor economic indicators to assess the rupee’s movement in the coming weeks.
