Karachi, May 11, 2025 – The Pakistani rupee is projected to remain stable in the coming week, beginning May 12, following the International Monetary Fund’s (IMF) approval of a fresh loan tranche exceeding $1 billion.
The inflow is seen as a critical factor in stabilizing the local currency and boosting investor confidence.
Financial analysts believe that the recent ceasefire agreement between Pakistan and India has also played a vital role in calming regional tensions, thereby contributing to a more stable outlook for the rupee. The easing of geopolitical pressure, combined with robust IMF backing, is expected to restore market sentiment and support the rupee in the near term.
Despite minor fluctuations, the rupee-dollar parity remained relatively stable over the past week. The rupee began the week at 281.22 against the US dollar and depreciated slightly, ending at 281.70 by Friday, a decline of just 48 paisas. Currency traders observed a modest uptick in dollar demand, but banks reported adequate liquidity levels, suggesting that any pressure on the rupee remains contained.
A report by Tresmark noted, “The dollar has been inching up by 10–15 paisas daily over the past few sessions, causing a temporary slowdown in export receipts. Exporters are holding off on orders, anticipating a better exchange rate. However, if market calm persists, normal flows should resume within two weeks.”
The IMF’s recent disbursement is part of a $7 billion Extended Fund Facility (EFF) agreed upon last year, bringing total inflows under the program to $2.1 billion. This financial support will strengthen Pakistan’s foreign exchange reserves and help maintain a stable rupee in the face of external challenges. Additionally, the IMF has approved an extra $1.4 billion under its climate resilience fund, further easing fiscal pressure.
The IMF praised Pakistan’s recent macroeconomic performance, highlighting a primary surplus of 2.0% of GDP in the first half of FY2025 and a reduction in inflation to 0.3% in April. The State Bank of Pakistan (SBP) has responded by cutting interest rates by 1,100 basis points since June, signaling a move toward more stable financial conditions.
Gross foreign exchange reserves stood at $10.3 billion by end-April and are expected to climb to $13.9 billion by end-June 2025, creating a more resilient and stable environment for the rupee moving forward.