Karachi, May 5, 2025 – The Pakistani rupee continued its downward trajectory against the US dollar, closing at PKR 281.22 in the interbank market on Monday.
This marks a depreciation of 16 paisas from the previous closing rate of PKR 281.06 on Friday, signaling ongoing pressure on the local currency.
Currency dealers and financial analysts attributed the rupee’s weakening to a combination of falling foreign exchange reserves, a widening trade deficit, and heightened dollar demand at the start of the business week. The consistent demand for the dollar, particularly from importers and corporate buyers, added strain to the rupee’s position.
According to the latest data released by the State Bank of Pakistan (SBP), the country’s total foreign exchange reserves fell by $184 million during the week ending April 25, 2025. Reserves declined to $15.252 billion from $15.436 billion reported on April 18. Analysts believe that this depletion reflects persistent external account vulnerabilities and limited financial inflows, further weakening support for the rupee.
Adding to the rupee’s woes is Pakistan’s swelling trade deficit, which widened sharply by 55% in April 2025 compared to the same month last year. Data from the Pakistan Bureau of Statistics (PBS) revealed that the trade gap surged to $3.39 billion in April, up from $2.18 billion a year earlier—the largest monthly trade imbalance recorded in three years. The widening gap underscores Pakistan’s heavy reliance on imports amid stagnant export growth, contributing to growing dollar demand.
Despite the current pressure, some currency market experts remain cautiously optimistic. They expect the rupee to find support in the coming weeks from improving inflows, particularly through worker remittances and upcoming export proceeds. These dollar inflows could help ease the supply-demand imbalance in the currency market.
Nonetheless, the rupee’s performance remains vulnerable to global dollar strength and Pakistan’s macroeconomic challenges. Until foreign exchange reserves stabilize and the trade imbalance narrows, the rupee may continue to trade under pressure against the dollar in the short term.