Karachi, June 26, 2025 – The Pakistani rupee continued its upward trajectory for the third consecutive day on Thursday, posting modest gains against the US dollar in the interbank market.
This gradual recovery comes on the heels of an Iran-Israel ceasefire that has improved regional sentiment and boosted investor confidence.
According to official data, the rupee appreciated by five paisas to close at PKR 283.67 per dollar, up from the previous day’s closing rate of PKR 283.72 in the interbank foreign exchange market. On June 23, 2025, the rupee had hit a recent low of PKR 283.87 per dollar, sparking concerns about further depreciation. However, geopolitical de-escalation has led to improved outlooks across South Asia and the Middle East.
Currency dealers pointed to multiple catalysts behind the rupee-dollar recovery. The ceasefire between Iran and Israel significantly reduced regional risk, leading to a drop in international oil prices. As a fuel-import-dependent nation, Pakistan stands to benefit from cheaper crude, which directly impacts its import bill. With lower oil-related dollar demand, pressure on the rupee has eased in the short term.
Despite this positive momentum, economic uncertainties remain. The newly unveiled federal budget for FY2025–26 has sparked inflation concerns, largely due to ambitious tax proposals and increased government spending targets. Market players fear that these fiscal measures may fuel speculation and raise dollar demand, potentially disrupting the current interbank stability.
Still, encouraging economic indicators offer hope. The State Bank of Pakistan (SBP) reported a surge in workers’ remittances, totaling $34.9 billion during the first 11 months of FY25—a sharp 28.8% increase from the prior year. In May alone, Pakistan received $3.7 billion in remittances, significantly boosting dollar liquidity and helping stabilize the rupee.
Additionally, the SBP confirmed a $130 million increase in foreign exchange reserves for the week ending June 13. This uptick enhances the central bank’s ability to cushion any sharp currency fluctuations in the interbank market and defend the rupee-dollar parity.
Analysts remain cautiously optimistic. While the rupee is showing resilience, its future strength will depend on consistent dollar inflows, disciplined fiscal management, and geopolitical calm. For now, the rupee’s gradual comeback signals a rare moment of calm in an otherwise turbulent economic landscape.