KARACHI, April 24, 2025 — The Pakistani rupee weakened further against the US dollar on Thursday, slipping to PKR 281.07 amid mounting geopolitical tension and growing pressure on the local currency.
The rupee recorded a minor decline of 10 paisas from the previous closing of PKR 280.97 in the interbank foreign exchange market.
Currency dealers and analysts attributed the rupee’s modest depreciation to intensifying global and regional geopolitical tension, which has led to heightened demand for safe-haven currencies like the US dollar. As international investors shift their focus toward the greenback, emerging market currencies—including the rupee—have come under renewed pressure.
Locally, the rupee is grappling with increased dollar demand fueled by end-of-month corporate settlements and import-related payments. These seasonal factors have triggered temporary shortages of foreign currency in the interbank market, amplifying the rupee’s vulnerability to external shocks.
Over the past several weeks, the rupee has shown signs of persistent weakness, reflecting a confluence of internal and external risks. The ongoing geopolitical tension, particularly in the Middle East, has contributed to a climate of economic uncertainty. This uncertainty has not only influenced investor sentiment but also added volatility to regional currency markets, including Pakistan’s.
A contributing factor to the rupee’s recent struggle is the decline in Pakistan’s foreign exchange reserves. Data released by the State Bank of Pakistan (SBP) revealed that reserves fell by $91 million during the week ending April 11, 2025, settling at $15.662 billion. This decline has raised fresh concerns regarding the SBP’s ability to intervene effectively in currency markets to defend the rupee and ensure stability.
Despite the prevailing tension and declining reserves, economists remain cautiously hopeful about the rupee’s medium-term outlook. They highlight the country’s narrowing current account deficit, strong remittance inflows, and a modest uptick in export earnings as positive indicators. If these trends continue, they could provide the rupee with some cushion against external pressure and support eventual stabilization.
Going forward, currency watchers suggest that the rupee’s trajectory will remain closely tied to both global geopolitical developments and domestic fiscal discipline. As tensions persist, the SBP’s role in managing currency volatility will be more critical than ever in preserving economic stability.