Karachi, June 5, 2025 – The Pakistani rupee witnessed a slight recovery against the US dollar in Thursday’s interbank trading, gaining support ahead of the Eid-ul-Adha holidays.
The rupee appreciated by five paisas, closing at PKR 282.17 to the dollar, compared to the previous day’s closing of PKR 282.22.
Currency dealers and market analysts attributed the minor appreciation to a temporary decline in demand for the dollar due to the upcoming Eid holidays. The government has declared a four-day public holiday from June 6 to June 9 in observance of Eid-ul-Adha, which has slowed down import-related dollar payments and offered some breathing room to the rupee.
The inflow of remittances and export proceeds also played a crucial role in supporting the local currency. With Eid approaching, overseas Pakistanis have been sending increased amounts of money back home, strengthening the rupee against the dollar. Remittances typically spike during major religious holidays, and this year has been no exception. A senior currency analyst remarked, “The rupee remains under pressure from persistent outflows, but the current surge in Eid-related remittances and exporter conversions into rupees has created a cushion for the local currency.”
Exporters are also converting their dollar earnings into rupees to meet fiscal and salary commitments ahead of the Eid break, which has added to the demand for the local currency. The combined effect of these inflows is helping the rupee stay relatively stable, even amid broader concerns about the external account.
However, the positive momentum may be short-lived. Economists have expressed concern about the rising import bill and its impact on the current account. According to the Pakistan Bureau of Statistics (PBS), the country’s trade deficit widened to $24 billion in the first 11 months (July–May) of FY2024–25, up 10.63% from $21.7 billion during the same period last year. This continued reliance on dollar-based imports remains a significant challenge for the rupee.
Looking ahead, the rupee’s performance will hinge on several factors, including upcoming fiscal measures, global dollar trends, international oil prices, and regional political stability. For now, the Eid holidays have offered temporary relief, but sustaining the rupee’s value will require broader economic resilience.