Rupee Fails to Impress Currency Market This Fiscal Year Despite SBP Boost

The Pakistani rupee appreciated by 1.8 percent against the US dollar during July–April FY2024-25, rising to Rs. 278.8 from Rs. 283.8 a year earlier, as inflation declined and the State Bank of Pakistan (SBP) did what it could to enforce strict measures to support the exchange rate. According to pre-budget documents seen by ProPakistani, the Real Effective Exchange Rate (REER) also dropped to 99.42 in April 2025 from 104.44 last year, reflecting improved competitiveness of the rupee as inflation pressures eased sharply. Monthly CPI inflation fell to a historic low of 0.3 percent in April, which allowed the central bank to start cutting interest rates. The SBP’s clampdown on exchange companies, coupled with tighter monitoring of cross-border transactions and administrative actions to curb dollar speculation, was credited with helping stabilize the currency. The combination of these moves restored market confidence and buffered the rupee from volatility despite rising imports and external payments.