Karachi, February 21, 2025 – The Pakistani rupee weakened further on Friday, reaching PKR 279.57 against the US dollar due to increasing demand for foreign payments.
The rupee-dollar exchange rate saw a depreciation of 11 paisas from the previous day’s closing rate of PKR 279.46 in the interbank foreign exchange market.
Currency market analysts attributed this rupee depreciation to a rising demand for the dollar, primarily driven by import and corporate payment obligations. With economic activity picking up, the need for imported raw materials has surged, putting additional pressure on the rupee-dollar valuation.
Despite the rupee’s depreciation, experts remain hopeful that the currency will stabilize in the coming days. Their optimism is based on improved foreign exchange reserves and increasing foreign inflows, particularly through workers’ remittances and export earnings. The Pakistani rupee has shown resilience against the dollar in recent weeks due to these positive economic indicators.
Pakistan’s total foreign exchange reserves witnessed an $85 million increase, according to the latest figures released by the State Bank of Pakistan (SBP). The country’s net forex reserves surged to $15.948 billion for the week ending February 14, 2025, compared to $15.863 billion recorded on February 7, 2025. The SBP’s reserves alone increased by $35 million, reaching $11.202 billion from $11.167 billion in the previous week.
A key factor impacting the rupee-dollar exchange rate is Pakistan’s current account balance. The country posted an overall current account surplus of $682 million for the first seven months of FY2024-25 (July–January), but January 2025 saw a deficit of $420 million. This marked the first monthly deficit since July 2024 and a 4% increase compared to January 2024’s deficit of $404 million. The SBP attributed this rising deficit to elevated import payments, which have exerted further pressure on the rupee-dollar exchange rate.
Despite these economic challenges, experts remain cautiously optimistic about the rupee’s stability. A 32% increase in remittances during the first seven months of FY2024-25 has bolstered foreign exchange reserves and helped mitigate volatility in the rupee-dollar exchange rate. Additionally, Pakistan’s exports rose by 10%, reaching $19.55 billion, narrowing the trade deficit and providing additional support for the rupee against the dollar.