Karachi, April 10, 2025 – The Pakistani rupee registered a modest gain against the US dollar in the inter-bank market on Thursday, appreciating by 0.08% as global financial markets reacted to fresh developments in US-China trade tensions. At the close of trading, the rupee stood at 280.56 against the greenback, strengthening by 22 paisas from the previous day’s closing rate of 280.78.
The rupee’s appreciation reflects cautious optimism in the local currency market, driven by a combination of domestic economic stability and international factors influencing investor sentiment. Although the gain may appear marginal, it is part of a broader trend of relative stability observed in recent weeks, especially as Pakistan maintains tight monetary discipline under ongoing economic reforms and IMF oversight.
Market analysts suggest that the strengthening of the rupee is partly influenced by recent shifts in global currency trends. International traders have begun moving toward traditional safe-haven currencies like the Japanese yen and Swiss franc in response to heightened geopolitical uncertainties. On Thursday, the US dollar lost ground internationally, declining by 0.7% to 146.68 yen and falling 0.62% to 0.8522 against the Swiss franc, indicating reduced confidence in risk-based assets.
These developments come in the wake of a dramatic policy shift by US President Donald Trump, who escalated his trade war with China even as he simultaneously announced a 90-day pause on tariffs for several other nations. The mixed signals caused a wave of volatility across global markets. While the tariff respite briefly fueled a relief rally in global equities, the aggressive stance on Chinese goods—raising tariffs to 125%—sparked fresh concerns about the long-term trajectory of global economic growth.
Currency markets responded accordingly, with the Chinese yuan weakening slightly in offshore trading following a volatile two-day swing that saw the currency dip to historic lows before partially recovering. Meanwhile, the Australian dollar, often seen as a risk-sensitive currency, lost ground as investors moved toward safer assets. Despite the Asian equity markets rallying in response to the temporary tariff pause, the underlying tone in currency markets remained cautious.
The Pakistani rupee’s performance amid these developments underscores the interconnectedness of local currency dynamics with global market movements. With oil prices also experiencing turbulence, the impact on currency parity has been notable. On Thursday, Brent crude futures fell 1.18% to $64.71 per barrel, while US West Texas Intermediate (WTI) dropped 1.04% to $61.70 per barrel. These movements followed Wednesday’s session, during which crude oil briefly surged by 4% before retreating due to ongoing trade war jitters.
Locally, the State Bank of Pakistan continues to maintain a watchful stance, with forex reserves showing steady performance and providing a cushion against external shocks. Analysts caution, however, that sustained pressure from global market volatility and any further escalation in trade disputes could test the resilience of emerging market currencies, including the rupee.
Despite the uncertain international backdrop, Pakistan’s financial markets have remained relatively composed. The slight strengthening of the rupee, even amid global turmoil, offers a glimpse of cautious investor confidence. Moving forward, much will depend on both geopolitical developments and domestic fiscal management as the country navigates the final quarter of its financial year.