KARACHI: The Pakistani rupee weakened to a 17-month low on Thursday, pressured by growing import demand that has raised the need for US dollars in the interbank market. The rupee slipped 0.03%, closing at Rs282.06 against the dollar, its lowest level since December 27, 2023, when it last hovered near this rate.
According to Arif Habib Limited (AHL), “PKR fell 0.10% day-on-day to 282.06—last seen in December 2023.” The currency dropped by Rs0.09 from Wednesday’s close of Rs281.97.
Sana Tawfik, Head of Research at AHL, attributed the decline to a surge in imports, which has driven up dollar demand and intensified pressure on the rupee.
So far this fiscal year, the rupee has lost:
- 0.39% month-to-date (MTD),
- 1.25% in the calendar year to date (CYTD), and
- 1.32% in the fiscal year to date (FYTD).
These figures reflect the ongoing tension between domestic dollar requirements and available foreign exchange, despite recent inflows from the International Monetary Fund (IMF).
After plunging to an all-time low of Rs307.10/$ in September 2023, the rupee had rebounded to Rs275.44 and remained stable for several months. However, the recent dip signals renewed pressure on policymakers attempting to manage exchange rate stability.
Meanwhile, Pakistan’s foreign exchange reserves improved, hitting $16.65 billion as of May 16, 2025, according to the State Bank of Pakistan (SBP). The SBP’s share stood at $11.45 billion, while commercial banks held $5.20 billion.
The rise in SBP reserves—up $1.043 billion in one week—was largely due to the IMF’s second tranche of the Extended Fund Facility (EFF), with SDR 760 million (roughly $1.023 billion) received on May 13.
This marks the highest reserve level since late December 2024. Compared to the start of the fiscal year, SBP reserves are up $2.06 billion, though they have dipped $264 million in calendar year terms—indicating ongoing external adjustment as part of a broader economic reform agenda.
Gold Prices Slide After Brief Rally
In a related market move, gold prices in Pakistan dropped on Thursday, reflecting a global correction triggered by a stronger US dollar and profit-taking after a short-lived rally.
According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA):
- The price of gold per tola fell by Rs1,900 to Rs347,500.
- The price of 10 grams declined by Rs1,629, settling at Rs297,925.
This decline followed a sharp spike of Rs6,600 per tola a day earlier, when gold peaked at Rs349,400.
Internationally, spot gold dropped 0.4% to $3,301.37/oz by 14:43 GMT, after reaching a two-week high earlier in the day. US gold futures also fell 0.4% to $3,301.00, while the US dollar index rose 0.3%, making gold more expensive for holders of other currencies.
Adnan Agar, Director at Interactive Commodities, noted that gold was showing signs of retreat after facing resistance at recent highs. “Prices hit $3,345 before dropping to $3,280. At the moment, they’re hovering around $3,294,” he said.
The rupee’s depreciation and fluctuations in gold prices highlight the fragility of Pakistan’s economic balance amid external and domestic pressures.
