Karachi, May 23, 2025 – The Pakistani rupee made a modest recovery against the dollar in the interbank foreign exchange market on Friday, offering a glimmer of relief as economic indicators show cautious optimism.
The rupee appreciated by 9 paisas, closing at PKR 281.97 per dollar, up from the previous day’s level of PKR 282.06 in the interbank market.
Currency analysts attributed the rupee’s slight rebound to robust inflows from export receipts and workers’ remittances, both of which provided a cushion against rising dollar demand from importers and corporate entities, typically seen at the end of the trading week. Despite the mounting pressures, the interbank market witnessed increased availability of foreign currency, buoying confidence in the local currency.
“The rupee managed to hold its ground and even gain slightly, thanks to stronger foreign exchange inflows,” said a senior currency dealer. “Even though the dollar demand remained firm, the supply side improved significantly.”
Another key factor contributing to the rupee’s resilience is the notable uptick in Pakistan’s foreign exchange reserves. According to the latest figures from the State Bank of Pakistan (SBP), reserves jumped by $1.035 billion during the week ending May 16, 2025, reaching $16.65 billion, up from $15.614 billion the previous week. The rise has largely been driven by fresh disbursements from the International Monetary Fund (IMF), providing a much-needed buffer for the economy.
The broader macroeconomic landscape is also shifting. From July to April of the current fiscal year, Pakistan recorded a current account surplus of $1.88 billion, a sharp turnaround from a $1.34 billion deficit during the same period last year. This reversal is credited to a 31% surge in remittances, which hit $31.2 billion, and a 6.25% increase in exports—developments that have directly supported the rupee’s position against the dollar in the interbank market.
However, challenges remain. The trade deficit widened by 8.81% to $21.35 billion, primarily due to a 7.37% rise in imports, which continues to exert pressure on the rupee, especially in the interbank environment where dollar liquidity can fluctuate unpredictably.
Experts believe that continued IMF support, coupled with consistent remittance flows and solid export performance, should help the rupee maintain its footing against the dollar as the fiscal year approaches its end. Nonetheless, they caution that sustained vigilance is essential, given the volatile global economic landscape and domestic fiscal pressures.