KARACHI: The Pakistani rupee is likely to remain stable — and could even strengthen slightly — in the near term, supported by seasonal remittance inflows during Ramadan and ahead of Eid, according to a report cited by The News.
The currency traded within a narrow band in the interbank market this week, closing at 279.55 to the dollar on Monday and 279.47 on Friday.
IMF Reviews Underway
An International Monetary Fund (IMF) team began talks with Pakistani authorities for:
- The third review under the $7 billion Extended Fund Facility (EFF)
- The second review of the $1.1 billion Resilience and Sustainability Facility (RSF)
If successfully completed, Pakistan could receive approximately:
- $1 billion under the EFF
- $200 million under the RSF
Both disbursements are expected by the end of April.
Remittances Provide Near-Term Cushion
According to financial rates platform Tresmark, the rupee has appreciated by around 60 paisa since the start of the year. While modest in isolation, the gain is notable given several economic and geopolitical headwinds, including:
- Escalating regional tensions following US and Israeli strikes on Iran
- Rising Brent crude prices above $72 per barrel
- A widening trade deficit
- Declining exports
- Tariff pressures
- Persistent inflation differential with the US
“Seasonal remittance inflows around Ramadan and Eid are likely to keep the rupee well bid in the near term,” Tresmark said in a client note.
Pakistan Prepares $1.3 Billion Eurobond Repayment as IMF Talks Approach
Pakistan’s remittances rose 15.4% year-on-year to $3.5 billion in January, though they declined 4% month-on-month. For the first seven months of FY2026, remittances increased 11.3% to $23.2 billion.
However, analysts caution that further rupee appreciation offers limited structural economic benefit, making the recent firmness somewhat counterintuitive.
Exporter Strategy and Emerging Market Trends
Tresmark advised exporters to consider forward contracts if costing margins are tight, noting that the rupee outlook remains stable to slightly stronger.
The report also observed that Pakistan’s currency stability is not unique. Several high-carry or reform-backed emerging market currencies have remained resilient despite geopolitical pressures, including:
- Egyptian pound
- Thai baht
- South African rand
- Brazilian real
- Mexican peso
- Indonesian rupiah
Overall, seasonal inflows and ongoing IMF engagement appear to be supporting short-term currency stability, though longer-term structural challenges remain.
