Karachi, May 2, 2025 – The Pakistani rupee recorded a marginal decline against the US dollar on Friday, slipping by 9 paisas as the interbank foreign exchange market resumed operations following the Labor Day holiday.
At market close, the rupee settled at PKR 281.06 per dollar, slightly weaker than the April 30 closing of PKR 280.97.
Currency analysts attributed this mild depreciation to heightened dollar demand as the market reopened. Although the supply of dollars remained stable—bolstered by remittances and export receipts—it was outweighed by strong buying from importers and corporate entities eager to settle post-holiday payments.
Despite the availability of foreign exchange from key inflows, underlying economic pressures continue to burden the rupee. Pakistan’s foreign exchange reserves are under strain, and broader geopolitical and regional uncertainties are affecting investor confidence. These factors limit the rupee’s ability to gain significant ground against the dollar in the near term.
Looking back at recent trends, the rupee-dollar exchange rate has shown minor but telling fluctuations. The rupee began last week at PKR 280.86 per dollar, dipped to PKR 281.07 by Thursday, and slightly recovered to PKR 280.97 on Friday. These movements highlight the currency’s continued sensitivity to both domestic economic developments and global market sentiment.
Further pressuring the rupee is the recent drop in Pakistan’s foreign exchange reserves. The State Bank of Pakistan reported a $367 million decline in reserves during the week ending April 18, bringing the total to $10.205 billion. The fall is primarily attributed to scheduled debt repayments, underscoring the nation’s ongoing fiscal challenges.
However, short-term stability for the rupee could come from expected inflows of over a billion dollars from the International Monetary Fund (IMF), along with seasonal remittances and steady export performance. Analysts believe these could temporarily cushion the rupee from sharp volatility.
Nevertheless, the longer-term strength of the rupee will depend on sustained economic reforms, a boost in reserves, and resilience against fluctuations in the global dollar market. Until such progress is made, the rupee-dollar exchange rate may continue to reflect uncertainty.