The Pakistani rupee experienced a slight depreciation against the US dollar on Monday, April 28, 2025. The interbank exchange rate closed at PKR 281.07, marking a 0.03% decline from Friday’s closing rate of PKR 280.97. This minor drop reflects ongoing pressures in the foreign exchange market.
Currency dealers attribute the rupee’s weakening to increased demand for dollars, driven by import and corporate payments typically observed at the start of the trading week. Additionally, analysts point to declining foreign exchange reserves and prevailing geopolitical tensions as significant contributors to the rupee’s vulnerability. Despite a brief recovery late last week, the rupee remains under pressure as Pakistan navigates global economic uncertainties.
Recent trends suggest that the rupee is expected to witness notable fluctuations in the coming week. Last week, the rupee began at 280.86 per dollar on Monday, depreciated to 281.07 by Thursday, and modestly improved to 280.97 on Friday. Market experts believe that these fluctuations will become more pronounced amid evolving geopolitical risks and global trade redirections.
Internationally, the US dollar has shown resilience, with the greenback trading at 143.57 yen and $1.1360 per euro. However, it remains on track for its largest monthly fall in nearly two and a half years, influenced by concerns over trade policies and global economic stability. The dollar’s performance impacts emerging market currencies, including the Pakistani rupee.
Financial terminal Tresmark noted that the rupee’s movement has broken a 15-month pattern of relative stability. Interestingly, this rupee weakness persists even though the global dollar index has declined nearly 10 percent. Analysts interpret this as part of a broader adjustment strategy, not merely a reaction to reserve depletion. They believe the rupee’s volatility is linked to global trade disruptions, including tariff-related announcements by former US President Trump.
According to a recent Fitch Ratings report, the rupee is forecasted to gradually weaken to 285 per dollar by June 2025 and could further slide to 295 by June 2026. The agency states that as Pakistan’s economic activity increases, current account pressures will build, pushing the rupee lower against the dollar in a managed manner.
Meanwhile, Pakistan’s State Bank (SBP) reported a decline of $367 million in foreign exchange reserves during the week ending April 18, reducing reserves to $10.205 billion. The drop primarily results from scheduled foreign debt repayments, which continue to pressure the rupee.
However, some relief is expected as inflows exceeding a billion dollars from the International Monetary Fund (IMF) are anticipated. Additionally, strong remittance and export inflows may help stabilize the rupee in the short term.
Despite positive inflows, the rupee’s future remains tied to careful economic management, foreign reserve rebuilding, and the broader movement of the dollar globally. Analysts warn that continued volatility in the rupee-dollar exchange rate is inevitable but could ultimately help Pakistan manage external vulnerabilities more effectively.