Fitch Ratings anticipates a gradual depreciation of the Pakistani rupee, projecting it to reach Rs285 per US dollar by June 2025 and slide further to Rs295 by the end of the 2026 fiscal year.
According to Krisjanis Krustins, Director of Asia-Pacific Sovereign Ratings at Fitch, the weakening of the rupee is expected to ease pressure on the current account as economic activity strengthens. The central bank is likely to allow this controlled depreciation as part of broader efforts to maintain external sector stability.
Although recent policy measures have helped stabilize the rupee, it remains among the region’s weaker currencies, having declined about 0.7% so far this year, as per Bloomberg data.
Fitch noted that while the depreciation could drive up import costs, it may prove beneficial in managing Pakistan’s trade deficit and conserving foreign exchange reserves—especially crucial as the country transitions into its post-IMF economic framework.
The State Bank of Pakistan has not issued a comment on this projection. The forecast comes on the heels of a period of relative strength for the rupee in 2024, when it outperformed many emerging market currencies.
The government, under Prime Minister Shehbaz Sharif, secured crucial financing from the International Monetary Fund after narrowly avoiding default in 2023. Fitch recently upgraded Pakistan’s credit rating, expressing confidence in the country’s reform trajectory.
Although easing inflation has provided room for monetary easing, the central bank opted to maintain its benchmark interest rate in March for the first time in nearly a year, citing risks from ongoing global trade disruptions. While imports are showing signs of revival, their impact has been moderated by lower global oil prices.
Krustins remarked during a Fitch webinar that the central bank appears cautious, using both interest rate policy and controlled currency depreciation as tools to manage evolving macroeconomic challenges.
