Karachi, May 20, 2025 – The Pakistani rupee weakened slightly against the US dollar on Tuesday, driven by rising demand for foreign exchange amid upcoming budgetary considerations and increased payments in the corporate and import sectors.
At the close of the interbank foreign exchange market, the rupee was recorded at PKR 281.92 per dollar, down by 15 paisas from the previous day’s closing rate of PKR 281.77. This slight depreciation marks the continuation of fluctuating trends seen in recent weeks, largely influenced by the shifting dynamics of dollar demand within the interbank environment.
Currency analysts attributed the rupee’s dip to a surge in dollar demand, especially from importers and corporate entities settling payments ahead of the new fiscal year. The anticipation surrounding the federal budget for FY2025–26 has also introduced uncertainty, prompting traders to adopt a more conservative approach in the interbank market.
Despite the minor decline, the rupee has demonstrated commendable stability in recent sessions, supported by favorable economic indicators and strong inflows. One of the most significant contributors to this stability was the recent receipt of $1.023 billion under the IMF’s Extended Fund Facility (EFF), disbursed on May 13. This inflow came on the heels of a $131 million increase in the country’s foreign reserves during the week ending May 9, providing much-needed cushion to the rupee, particularly in the interbank space.
Pakistan’s external account has also shown signs of resilience. Between July and April of FY2024–25, the country registered a current account surplus of $1.88 billion, a sharp turnaround from the $1.34 billion deficit in the same period last year. This positive shift was largely powered by a 31% surge in workers’ remittances, which reached $31.2 billion, and a 6.25% rise in exports.
However, challenges remain. A growing trade deficit—expanding by 8.81% to $21.35 billion due to a 7.37% increase in imports—continues to exert pressure on the rupee, especially in the interbank market where dollar demand remains high.
Looking forward, experts maintain a cautiously optimistic outlook. With sustained IMF support, rising exports, and healthy remittance flows, the rupee is expected to maintain relative stability against the dollar in the interbank market through the remainder of the fiscal year.