Karachi, May 27, 2025 – The Pakistani rupee showed slight improvement against the US dollar on Tuesday, buoyed by increased foreign currency inflows in the interbank market.
The rupee closed at PKR 282.06 per dollar, marking an appreciation of 11 paisas from Monday’s closing rate of PKR 282.17 in the interbank foreign exchange market.
Currency analysts attributed the rupee’s modest gain to enhanced inflows from workers’ remittances and export proceeds. Seasonal remittances ahead of Hajj, where overseas Pakistanis are sending funds to support their families’ religious travel, further strengthened the supply of dollars in the interbank system.
Another supportive factor for the rupee has been the easing of international oil prices, which reduced Pakistan’s import bill and helped lower dollar outflows. Despite these positives, market experts remain cautious due to pre-budget activity by importers who are accelerating foreign purchases to pre-empt possible hikes in duties and taxes. This rush has increased demand for the dollar in the interbank market, limiting the rupee’s upward momentum.
The rupee also found some support from Pakistan’s improving external sector. According to the State Bank of Pakistan (SBP), the country’s foreign exchange reserves increased by $1.035 billion to $16.65 billion during the week ending May 16, 2025. This rise, reportedly due to fresh inflows from the International Monetary Fund (IMF), is seen as a key factor in ensuring dollar liquidity in the interbank market.
From a broader economic standpoint, Pakistan’s current account balance reflects encouraging trends. For the July-April period of the current fiscal year, the country posted a surplus of $1.88 billion, a significant turnaround from the $1.34 billion deficit recorded during the same period last year. This improvement is driven largely by a 31% jump in remittances—reaching $31.2 billion—and a 6.25% rise in exports. These developments have played a stabilizing role for the rupee in its parity against the dollar.
Nevertheless, risks remain. The trade deficit widened by 8.81% to $21.35 billion, fueled by a 7.37% increase in imports. This expansion continues to exert pressure on the rupee, particularly in the interbank foreign exchange market where demand for the dollar remains volatile.