Karachi, May 26, 2025 – The Pakistani rupee witnessed a slight dip of 9 paisas against the US dollar on Monday, closing at PKR 282.06 in the interbank foreign exchange market. This marks a minor decline from last Friday’s closing rate of PKR 281.97.
Currency experts attributed the modest weakening of the rupee to increased dollar demand, particularly on the first trading day of the week. The upcoming Hajj season has also driven up dollar outflows, further pressuring the local unit in the interbank market.
Additionally, import-related dollar demand has intensified ahead of the federal budget, scheduled for announcement on June 10, 2025. Traders expect continued pressure on the rupee in the coming days due to advance import payments and heightened economic activity.
However, the rupee found partial support from the country’s improving external account position. The State Bank of Pakistan (SBP) reported that foreign exchange reserves surged by $1.035 billion during the week ending May 16, 2025. Reserves now stand at $16.65 billion, up from $15.614 billion the previous week. Analysts link this rise to fresh inflows from the International Monetary Fund (IMF), providing a critical buffer for dollar liquidity in the interbank system.
From a broader perspective, macroeconomic indicators show mixed signals. Between July and April of the current fiscal year, Pakistan posted a current account surplus of $1.88 billion— a remarkable turnaround from a $1.34 billion deficit in the same period last year. This shift is largely due to a 31% surge in worker remittances, which reached $31.2 billion, and a 6.25% rise in exports. These inflows have helped stabilize the rupee against the dollar in recent months.
Still, challenges persist. Pakistan’s trade deficit widened by 8.81%, touching $21.35 billion, driven by a 7.37% jump in imports. This trend continues to strain the rupee, particularly in the interbank market, where dollar availability remains sensitive to demand spikes.
Analysts believe that continued IMF backing, strong remittances, and resilient exports will be crucial in maintaining the rupee’s strength. Nonetheless, they warn that domestic fiscal uncertainty and global volatility could still impact currency stability.