Karachi, June 18, 2025 – The Pakistani rupee continued its downward trend against the US dollar on Wednesday, primarily due to mounting geopolitical tensions and rising global oil prices. The rupee slipped by 14 paisas, closing at PKR 283.55 against the dollar in the interbank market, compared to the previous day’s rate of PKR 283.41.
This marks the seventh consecutive session in which the rupee has depreciated against the dollar, losing a cumulative PKR 1.38 during the period. Currency analysts have attributed the continued pressure on the rupee to the worsening Middle East conflict, particularly between Iran and Israel, which has driven up international oil prices. As Pakistan remains heavily reliant on imported oil to meet its energy needs, the spike in oil prices has triggered higher demand for dollars, straining the local currency.
In addition to global concerns, domestic developments have also played a role. Experts noted that certain fiscal measures introduced in the federal budget for 2025-26 have added to market uncertainty, contributing to the rupee’s weakness.
However, amid these challenges, some encouraging indicators have emerged. According to data released by the State Bank of Pakistan (SBP), workers’ remittances reached $34.9 billion during the first 11 months of FY25 (July–May), marking a significant 28.8% year-on-year rise. In May alone, remittances stood at a robust $3.7 billion, providing essential dollar inflows to help stabilize the rupee.
Furthermore, the SBP reported an increase of $277 million in total foreign exchange reserves for the week ending June 6. The reserves now total $16.875 billion, with the SBP’s share at $11.676 billion. The improved reserve position gives the central bank greater capacity to manage the rupee-dollar exchange rate and counter excessive market volatility.
Despite these positive developments, analysts remain cautious about the short-term outlook. They warn that continued geopolitical uncertainty and unpredictable oil prices could exert further pressure on the rupee, though strong remittance inflows and healthy reserves offer a degree of support. Future movements in rupee-dollar parity will hinge on global stability and the government’s fiscal discipline.