At Rs281.80 to the dollar, the rupee appears steady. For several weeks, it has traded within a tight range, offering rare relief in a country accustomed to currency shocks. Officials showcase this as a sign of discipline and recovery. But the calm is deceptive: it rests on stop-gap measures, not genuine strength.
The SBP’s data shows foreign reserves at $19.66 billion, with $14.3 billion directly under its control. Compared with last year’s dangerously low levels, these figures look healthier. Yet in the context of Pakistan’s economy which is dependent on costly imports of energy, food and machinery, the cushion remains thin. A few weeks of high oil prices, another round of floods, or a delay in external inflows could quickly erode it.
Analysts caution that the stability will not last long. Forecasts suggest the rupee could slide by five to six per cent in the coming months, drifting towards Rs284 by December. Even this small shift matters: with imports priced in dollars, depreciation immediately filters through to fuel, transport and food, forcing households already under strain to cut deeper.
The current calm is held in place by policy intervention. The SBP has been managing liquidity tightly, while regulators have cracked down on illegal dollar trading. These moves, combined with a credit rating upgrade that temporarily improved investor confidence, have kept volatility in check. But these props are fragile. Floods have cut into export earnings, debt repayments loom large and structural weaknesses from stagnant productivity to a narrow tax base remain unresolved.
The danger lies in mistaking temporary calm for recovery. A steady rupee may look good on a chart, but it does not put food on the table or create jobs. It cannot compensate for inflation eating into wages or the widening gap between household income and the cost of living.
The rupee’s stability is not proof of resilience but a pause before the next test. Unless this breathing space is used to build real capacity expanding exports, diversifying the economy, and protecting vulnerable groups Pakistan risks paying a heavier price later.
Nofal Rauf Chouhan
Lahore
