2025 Proved a Better Year for Pakistani Rupee — What Lies Ahead in 2026?
Karachi: The year 2025 turned out to be relatively stable for the Pakistani rupee against the US dollar, although some fluctuations were observed during the year. The key question now is whether this stability will continue in 2026 or if major changes are expected.
At the start of 2025, the US dollar was trading at around Rs 278 in the interbank market. By the end of December, the exchange rate stood close to Rs 280. Throughout the year, the dollar largely remained within the range of Rs 275 to Rs 285. A slight increase was seen mid-year when the dollar touched around Rs 285, but the rupee later regained some ground.
According to economic experts, several factors contributed to preventing a sharp depreciation of the rupee in 2025. One major reason was a significant decline in inflation, which fell to single digits—around 5 to 7 percent—compared to 2024. This reduction eased pressure on the local currency.
Experts also pointed to an increase in remittances sent by overseas Pakistanis, which provided crucial support to the rupee. Improved foreign exchange reserves, supported by agreements with the International Monetary Fund (IMF) and financial inflows from other countries, helped restore market confidence.
Additionally, the State Bank of Pakistan maintained control over interest rates and imports to prevent excessive demand for dollars. These measures played a key role in keeping the exchange rate within a manageable range.
While the rupee did not make any significant gains against the dollar in 2025, it also avoided the sharp declines witnessed in previous years. Economists describe this trend as “managed stability,” where government and central bank policies kept the currency within defined limits.
Looking ahead, analysts remain cautiously optimistic about 2026. They believe that if current economic policies continue, the Pakistani rupee is likely to remain broadly stable. Although some pressure on the currency may emerge, the overall outlook is expected to remain better than in recent years.
