Karachi, March 16, 2025 – The Pakistani rupee is expected to remain stable in the upcoming week starting March 17, 2025, as dollar inflows linked to Eid-related remittances provide support to the currency.
The rupee is anticipated to trade within a limited range, benefiting from optimism following the successful completion of the first review of the $7 billion International Monetary Fund (IMF) loan program. Additionally, robust remittance inflows during Ramadan are further strengthening the local currency.
“The IMF and Pakistani authorities have made substantial progress towards reaching a staff-level agreement (SLA) on the first review under the 37-month Extended Arrangement under the Extended Fund Facility (EFF),” the IMF stated on Saturday.
The IMF also noted that discussions have advanced regarding Pakistan’s climate reform agenda, which aims to mitigate risks associated with natural disasters. Additionally, potential financing under the Resilience and Sustainability Facility (RSF) is being explored. Policy discussions between IMF representatives and Pakistani authorities will continue virtually in the coming days to finalize agreements.
In the interbank market, the rupee opened at 280.07 per dollar on Monday but experienced minor fluctuations, closing at 280.22 per dollar on Friday.
A financial terminal, Tresmark, remarked in a client note that the decision to maintain the current monetary policy should have strengthened the rupee. However, the local currency slightly depreciated due to several factors, including market uncertainty surrounding the IMF review process, foreign exchange reserves stabilizing around $16 billion, and regional currency trends—such as the Indian rupee briefly touching 87 per dollar.
“But what’s currently driving the bazaar is the ongoing dollar inflows from remittances during Ramadan, which will persist until Eid. Improved dollar liquidity is evident in rising premiums, while lower oil prices and reduced cotton imports have eased import pressure,” Tresmark reported.
Analysts expect the IMF staff-level agreement to be finalized by the end of March, unlocking a $1 billion tranche along with additional climate resilience financing and other multilateral funding. This could lead to a re-evaluation of Pakistan’s country risk and better access to external funding.
The current account is projected to remain near equilibrium for February and March. While some depreciation of the rupee by 5-10 paisa per week could be a controlled strategy, analysts suggest that forward booking for a three-month horizon appears more practical at this stage.