Islamabad, 6 May 2025: SBP Interest Rate Cut expectations offered little relief to the Pakistani rupee (PKR), which continued its downward trend against the US dollar, recording its third consecutive session in decline on Tuesday.
Despite optimism surrounding possible monetary easing, the currency failed to hold its ground in the interbank market.
The rupee began trading at Rs. 282 per dollar and remained volatile throughout the session, fluctuating between 281 and 283 before eventually settling at Rs. 281.37.
This marked a day-on-day depreciation of 15 paisas, or approximately 0.05 percent.
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Currency traders noted that open market rates across multiple exchange counters remained steady between Rs. 282 and Rs. 284 per dollar, suggesting limited room for upward correction even amid growing speculation around an SBP Interest Rate Cut in the coming months.
On a fiscal year-to-date (FYTD) basis, the rupee has weakened by around 1.08 percent against the greenback.
Analysts attribute this continued pressure to sluggish dollar inflows, cautious investor sentiment, and persistent demand from importers.
In broader currency movements, the PKR also lost value against several other major global currencies during the session.
It shed four paisas versus the UAE Dirham and two paisas against the Saudi Riyal. Losses were also recorded against the Canadian Dollar, with the PKR slipping 10 paisas.
Meanwhile, the local currency appreciated slightly against the Australian Dollar, gaining 21 paisas in the interbank market.
However, it faced larger setbacks against the Euro and British Pound, dropping by 80 paisas and Rs. 1.21 respectively.
Despite a relatively stable macroeconomic backdrop, the foreign exchange market has remained sensitive to global economic trends, remittance flows, and central bank policy outlooks.
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Economists believe that a rate cut by the State Bank of Pakistan in the near term could help stimulate domestic activity, but would likely have a limited immediate effect on foreign exchange parity unless backed by stronger external financing and export growth.
With the rupee under persistent strain, market watchers are closely monitoring monetary policy signals and upcoming IMF review outcomes, both of which are expected to influence the next direction of the exchange rate.
