Karachi, April 25, 2025 – The Pakistani rupee (PKR) showed a modest recovery on Friday, strengthening by 10 paisas to settle at PKR 280.97 against the US dollar (USD), compared to the previous day’s closing of PKR 281.07 in the interbank foreign exchange market.
Currency market analysts attributed this recovery in the rupee’s value to the inflows of remittances and export receipts, which helped counterbalance the demand for the dollar seen on the previous trading day. The rupee remained under pressure for much of the day, largely due to a fall in foreign exchange reserves and prevailing geopolitical tensions. However, the dollar supply from exports and remittances helped the rupee to make a gain by the end of the day.
Despite the recent recovery, experts caution that the Pakistani rupee faces ongoing challenges. One key concern is the continuing decline in foreign exchange reserves, which places pressure on the local currency. Additionally, Pakistan’s impending foreign payments could further strain the rupee’s position against the dollar.
The State Bank of Pakistan (SBP) reported a significant drop in its official foreign exchange reserves, with a decline of $367 million during the week ending April 18, 2025. As a result, the SBP’s forex reserves stood at $10.205 billion, down from $10.572 billion just a week earlier, as of April 11. This decrease in reserves is attributed to necessary foreign debt repayments by the federal government, which, while vital for maintaining international creditworthiness, continue to exert pressure on the central bank’s reserve position.
On a positive note, Pakistan is expecting inflows of over a billion dollars from the International Monetary Fund (IMF), which is expected to provide a boost to the country’s foreign exchange reserves. Additionally, strong remittances and exports are expected to support the rupee in maintaining stability. However, the ongoing challenges in managing foreign payments and foreign exchange reserves will likely continue to influence the rupee’s performance against the dollar in the coming weeks.