KARACHI: The Pakistani rupee is expected to remain stable or even strengthen slightly in the near term, primarily due to seasonal remittance inflows during the holy month of Ramazan and the Eid festival, a report said on Saturday.
This week, the local currency traded within a narrow range in the interbank market. It closed at 279.55 against the dollar on Monday and ended at 279.47 on Friday.
The International Monetary Fund (IMF) team on Wednesday started discussions with Pakistani authorities for the third review of the $7 billion Extended Financing Facility (EFF) and the second review of the $1.1 billion Resilience and Sustainability Facility (RSF). After the successful completion of the review, Pakistan will be eligible for the disbursement of approximately $1 billion under the EFF and an additional $200 million under the RSF by the end of April.
The geopolitical situation has worsened as the United States and Israel launched strikes on Iran, plunging the region into a new conflict.
The rupee has appreciated by approximately 60 paisa since the beginning of the year, said Tresmark, a platform that provides live financial rates, in a client note. While this increase is modest on its own, it is more significant when considering the broader context, it said. The rupee has strengthened despite several challenges, including rising geopolitical risks and US posturing in the region, escalating tensions along the western border, isolated internal security incidents, Brent crude prices trading above $72 a barrel, a steady decline in exports, a widening trade deficit, tariff pressures and a persistent inflation differential with the US.
“Seasonal remittance inflows around Ramazan and Eid are likely to keep the rupee well bid in the near term,” the Tresmark’s report said.
“That said, most economists argue that further appreciation offers limited structural benefit, which makes the recent firmness somewhat counterintuitive,” it added.
Pakistan’s remittances rose 15.4 per cent year-on-year (YoY) in January to $3.5 billion. However, these flows dropped 4.0 per cent on a month-on-month (MoM) basis. Remittances increased 11.3 per cent to $23.2 billion in the first seven months of the fiscal year 2026.
“Premiums have marginally improved. If costing is tight, exporters should opt for forwards, as rupee outlook continues to look stable to slightly stronger,” it said.
According to the report, the rupee’s stability is not isolated. Several high-carry or reform-backed EM currencies have also held firm despite geopolitical noise, including the Egyptian pound, Thai baht, South African rand, Brazilian real, Mexican peso, and Indonesian rupiah.
