Fitch Ratings expects Pakistan to slowly let the rupee weaken as the country’s economic activity picks up, helping to ease potential pressure on its current account. According to Fitch’s Asia Pacific Sovereign Ratings Director, Krisjanis Krustins, the rupee could slide to 285 per US dollar by June 2025, and further to 295 by mid-2026. This would mark a 1.5% and 5% depreciation from the current rate of around 280.76, respectively.
The move is seen as part of the central bank’s strategy to maintain balance in foreign trade and payments as the economy gains momentum. Despite recent gains — including a $1.2 billion current account surplus in March 2025 and a crackdown on illegal dollar trading — the rupee has slipped by 0.86% since the fiscal year began.
Pakistan’s economic picture is mixed: while foreign exchange reserves have dipped to $10.6 billion due to debt repayments, the government expects fresh external inflows of up to $5 billion by June. These funds, largely from international lenders, could push reserves up to $14 billion.
Meanwhile, imports have climbed to $5.7 billion, signaling renewed economic activity. Growth for the current fiscal year is now projected at 3%, an improvement from 2.5% in FY24.
The IMF is also expected to greenlight the next $1 billion tranche under its $7 billion bailout package by late April or early May. The IMF continues to urge Pakistan to let market demand and supply determine the exchange rate, reinforcing the push for a more flexible currency policy.
