Karachi, April 23, 2025 – The Pakistani rupee lost ground against the US dollar on Wednesday, depreciating by 20 paisas in the interbank market. The local currency closed at PKR 280.97 per USD, down from PKR 280.77 the previous day, as the dollar surged on the back of renewed global demand and shifting U.S. monetary policy signals.
According to currency market analysts, the PKR’s slip mirrors broader global trends, where emerging market currencies are struggling to maintain parity amid a strengthening U.S. dollar. The greenback’s rise has been fueled by an evolving stance from the Biden administration, particularly President Joseph Biden’s recent comments expressing support for the Federal Reserve’s monetary tightening policies—a pivot from his previously more neutral tone on the Fed’s independence.
This newfound alignment between the executive branch and the U.S. central bank has reinforced investor confidence in the dollar, prompting a flight from riskier assets and currencies toward the relative safety of the greenback. As a result, currencies across Asia, Africa, and Latin America have faced renewed pressure, with the Pakistani rupee among those affected.
Locally, several short-term economic factors have also contributed to the rupee’s depreciation. Increased demand for dollars within the interbank market, particularly as companies rush to meet end-of-month import payments and settle corporate financial obligations, has created temporary shortages of the greenback. These dollar outflows have added further strain to the local currency, even as the State Bank of Pakistan continues its efforts to manage liquidity.
“Import-driven dollar demand tends to spike near the end of each month,” one Karachi-based forex dealer explained. “When this coincides with external pressures like a strong U.S. dollar, it’s almost inevitable that the rupee will face some depreciation.”
Despite this slight depreciation, the PKR has remained relatively stable over recent weeks, thanks to cautious interventions by the central bank and consistent remittance inflows. However, volatility remains a concern, especially with external financing requirements mounting and investor sentiment being swayed by global economic and political developments.
Experts suggest that the next few weeks will be crucial in determining the rupee’s trajectory. Upcoming data releases on Pakistan’s trade deficit, inflation figures, and any potential announcements related to International Monetary Fund (IMF) engagement could either reinforce or ease pressure on the local currency.
From a broader economic perspective, the rupee’s slight dip is not unusual given the current geopolitical and financial landscape. However, it underscores the vulnerability of emerging market currencies to shifts in global investor sentiment and macroeconomic policy from major economies like the U.S.
Market participants, importers, and exporters are advised to monitor forex markets closely and consult with their financial institutions to hedge against potential currency risks. The State Bank of Pakistan (SBP) is expected to remain vigilant in the days ahead, balancing market stability with inflation control and foreign exchange reserve management.
As the global financial system continues to react to U.S. monetary shifts and regional economic challenges, the PKR’s performance will be closely watched as a barometer of economic resilience in Pakistan.