Karachi, June 13, 2025 — The Pakistani rupee came under pressure on Friday, sliding closer to the PKR 283 mark against the US dollar as geopolitical tensions in the Middle East escalated following Israel’s military offensive against Iran.
The interbank market closed the day with the rupee falling by 29 paisas, settling at PKR 282.96 compared to the previous close of PKR 282.67.
Currency market analysts attributed the rupee’s depreciation primarily to the impact of the ongoing Middle East conflict, which has sent shockwaves through global commodity and financial markets. Crude oil prices spiked sharply, driven by fears of supply disruptions, further straining the economies of oil-importing countries like Pakistan.
Pakistan’s heavy reliance on imported petroleum means that any increase in global oil prices significantly raises the country’s dollar-denominated import bill, putting downward pressure on the rupee. Despite recent gains in Pakistan’s external account — such as rising remittance inflows and foreign exchange reserves — the impact of geopolitical risk has overshadowed these positive developments.
The dollar’s strength against the rupee was exacerbated by investor uncertainty and an uptick in demand for safe-haven currencies. However, officials remain cautiously optimistic due to Pakistan’s improving macroeconomic indicators. The State Bank of Pakistan (SBP) recently reported a strong surge in workers’ remittances, which reached $34.9 billion during the July–May period of FY25 — a 28.8% increase over the same period last year.
In May 2025 alone, Pakistan received $3.7 billion in remittances, marking a 16% rise on a month-on-month basis and a 13.7% increase year-on-year. This consistent inflow of dollars has provided vital support to the country’s forex reserves.
Additionally, Pakistan’s foreign exchange reserves grew by $277 million during the week ending June 6, 2025. The total reserves climbed to $16.875 billion, with SBP-held reserves specifically increasing to $11.676 billion from $11.509 billion a week earlier. These gains suggest the central bank is in a stronger position to intervene in currency markets if needed and to ensure dollar liquidity remains intact.
Nonetheless, the rupee’s outlook remains uncertain in the short term, as further developments in the Middle East could drive renewed volatility in the dollar-rupee exchange rate.