Pakistan’s real exchange rate strengthens to 104.8 as rupee holds firm

Govt raises Rs445b in bond auction; gold hits Rs453,562/tola; silver surges to record high at Rs6,822

KARACHI:

Pakistan's Real Effective Exchange Rate (REER) index rose to 104.8 in November 2025, up from 103.9 in October, according to the latest data from the State Bank of Pakistan (SBP).

Similarly, the Pakistani rupee edged up 0.01% against the US dollar, closing at 280.27 in the inter-bank market on Wednesday.

Furthermore, the SBP held an auction for Pakistan Investment Bonds (Fixed Rate), with settlement scheduled for December 18, 2025, covering two-year (zero coupon), three-year, five-year, 10-year, and 15-year (zero coupon) tenors.

Total bids stood at Rs2.488 trillion in face value, while competitive acceptance amounted to Rs406.81 billion. Including non-competitive bids of Rs28.657 billion and short selling of Rs9.5 billion (primarily in two-year tenor), the government raised a total of Rs444.967 billion in face value.

Cut-off yields reflected investor sentiment across different maturities – 10.78% for a two-year bond, 10.84% for a three-year, 11.19% for a five-year, 11.67% for a 10-year, and approximately 12% for a 15-year tenor.

The highest participation was seen in the shorter and medium tenors, with total acceptance of Rs116.87 billion (two-year), Rs84.34 billion (three-year), Rs103.36 billion (five-year), Rs104.20 billion (10-year), and Rs36.20 billion (15-year), indicating sustained demand for government securities amid the prevailing economic conditions.

Meanwhile, gold prices in Pakistan surged as international markets remained firm, supported by renewed expectations of the US Federal Reserve rate cuts following weak labour market signals and escalating US-Venezuela tensions that bolstered safe-haven demand.

In the local market, gold per tola increased by Rs2,700 to reach Rs453,562. Ten-gram gold followed suit, rising Rs2,315 to close at Rs388,856, according to rates published by the All-Pakistan Gems and Jewellers Sarafa Association. On Tuesday, gold had slipped Rs4,000 per tola, settling at Rs450,862.

Meanwhile, silver prices in Pakistan soared to a record high, with the metal gaining Rs290 to reach Rs6,822 per tola. Globally, spot silver surged around 4% to $66.3 an ounce, briefly touching an all-time peak of $66.51.

"Silver is pulling gold up with it: there is some rotational money going out of gold and into silver, platinum, and palladium," said Marex analyst Edward Meir.

Adnan Agar, Director at Interactive Commodities, noted that gold trading had been range-bound between $4,325 and $4,335 per ounce. He said upcoming US inflation data and the Bank of Japan's monetary policy decision were key events that could influence global gold trends.

Agar added that while silver and platinum were showing a strong upward momentum, gold remained supported and could potentially break records in the near term.

He highlighted that trading volumes were expected to remain low during the holiday season, with activity likely to pick up after January 1, when actual market volumes return.