The Pakistani rupee continued its downward trajectory against the US dollar in the inter-bank market on Monday, slipping 0.06%. By the close of trading, the local currency settled at 283.87 against the greenback, reflecting a loss of 17 paisa.
On a weekly basis, the rupee also posted a decline, weakening 0.26%, or 74 paisa. It ended the previous week at 283.70 compared to 282.96 in the prior week, as per data released by the State Bank of Pakistan.
Over the past six months, the euro has appreciated 12%, the British pound has strengthened 9% and the US dollar has increased 2% against the rupee, according to Topline Securities CEO Mohammed Sohail.
The rupee has remained under pressure against the dollar in recent months, though it has shown some stability compared to its sharp historical declines. After hitting an all-time low at 307.1 in September 2023, the rupee recovered somewhat, but has faced renewed depreciation pressure in 2025.
Short-term trends show minor fluctuations, with a 0.07% daily fluctuation and a 0.41% monthly decline, suggesting some stabilisation. However, the local currency remains vulnerable due to ongoing economic challenges, including rising inflation, external debt repayments and fluctuating forex reserves.
While recent IMF support has provided temporary relief, a sustained recovery will depend on structural reforms and improved fiscal management to prevent further weakening in the coming months.
"Despite this softening, the rupee's recent movement reflects a more stable and sustainable path," noted Sohail.
Unlike the abrupt and destabilising devaluations seen before mid-2023, this depreciation phase has been gradual and market-driven, backed by IMF-supported reforms. Such a controlled adjustment is considered healthier for the economy as it minimises uncertainty, bolsters investor confidence and better aligns with underlying economic fundamentals.
The dollar fell on Monday after Federal Reserve Vice Chair for Supervision Michelle Bowman said that the US central bank should consider rate cuts soon, reversing the dollar's earlier rally following the US bombing of some nuclear sites in Iran, according to Reuters. Meanwhile, gold prices in Pakistan edged lower, diverging from the international market, where rates inched up amid rising Israel-Iran tensions, which offset the impact of a stronger US dollar. Globally, investors remained cautious, closely monitoring Iran's potential response. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold in the local market settled at Rs358,165 per tola, reflecting a slight decrease of Rs300. Meanwhile, the price of 10-gram gold fell Rs257 to close at Rs307,068.
Internationally, gold prices nudged higher as escalating Israel-Iran tensions outweighed pressure from a stronger dollar, with markets closely watching Iran's next move, according to Reuters. Spot gold was up 0.2% at $3,375.79 an ounce as of 1339 GMT. US gold futures gained 0.2% at $3,391.70.
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