KARACHI, April 19 — Pakistan’s rupee is expected to remain broadly stable against the United States dollar in the coming week, supported by improving external inflows and a surprise current account surplus, analysts said.
The Pakistani Rupee closed at 278.92 per dollar in the interbank market this week, slightly stronger than 279.01 a week earlier, reflecting steady demand-supply conditions in the foreign exchange market.
Brokerage Tresmark said in a client note that the rupee had strengthened below the 279 level for the first time in about 15 months, driven by a current account surplus exceeding $1 billion.
The firm cited multiple supportive factors, including an additional $2 billion deposit pledged by Saudi Arabia, a successful $500 million Eurobond issuance at around 7% for a three-year tenor, and record inflows of $260 million through the Roshan Digital Account scheme.
Analysts said these developments have improved investor sentiment, with signs of renewed interest in Pakistan’s sovereign debt markets. They added that rebuilding of the sovereign yield curve could pave the way for future international issuances, including Sukuk and Panda bonds.
Pakistan’s real effective exchange rate (REER), a key indicator of trade competitiveness, has risen above 105 — its highest level in roughly seven and a half years — suggesting a relatively stronger currency position. However, analysts cautioned that a higher REER may compress exporters’ margins.
Exporters have begun increasing forward dollar sales as expectations of sharp rupee depreciation ease. Forward premiums have improved, and hedging activity is expected to gain pace in the coming weeks.
In the domestic debt market, yields have softened. The benchmark 10-year Pakistan Investment Bond yield declined to 12.44% from a recent peak of 13.29%, indicating easing interest rate expectations.
Meanwhile, portfolio flows have stabilised. The Special Convertible Rupee Account recorded a net inflow of $23 million after significant outflows exceeding $450 million last month, giving policymakers greater flexibility in managing liquidity and interest rates.
Analysts expect the rupee to trade in a narrow range in the near term, barring any major external shocks.