Rupee seen stable on current account surplus

KARACHI: The Pakistani rupee is expected to stay stable against the US dollar next week after the country reported a current account surplus for April, despite widespread expectations of a deficit.

Positive sentiment is prevailing in the market regarding Pakistan’s economy, fuelled by several developments: a truce between India and Pakistan following recent military escalations that represented the worst tensions in decades; the central bank receiving the second tranche of $1.02 billion from the International Monetary Fund (IMF) as part of a $7 billion extended fund facility; and the country’s current account posting a smaller surplus of $12 million, despite rising imports.

The current account surplus dropped to $12 million, a staggering 99 per cent decrease from the previous month. Year-on-year, the surplus fell by 96 per cent. During the 10 months of the fiscal year 2025, the surplus reached $1.88 billion, showing a significant improvement from a deficit of $1.33 billion during the same period last year.

The rupee has maintained its stability, trading within certain ranges against the dollar. The local currency closed at 281.56 per dollar in the interbank market on Monday and at 281.61 on Friday. Considering this trend, traders and analysts believe the rupee will continue along this trajectory, supported by the recent IMF loan disbursement and the current account surplus.

“Increased demand for dollars for import payments has pressured the rupee, but we don’t think it will breach the 281 per dollar level in the coming week,” a currency dealer said.

In April, imports of goods rose by 18 per cent year-on-year to $5.237 billion, compared to $4.44 billion in the same month the previous year. On a month-on-month basis, goods imports also increased by 6.0 per cent.

The real effective exchange rate (REER) depreciated to 99.4 in April, down from 101.6 in the previous month.

The foreign exchange reserves held by the State Bank of Pakistan stood at $10.4 billion as of May 9. The IMF loan payment increased SBP’s reserves, but the bank said that the changes would show up in its reserves for the week ending May 16.