Pakistani Rupee Hits 20-Month High Against Dollar, Dirham

The Pakistani rupee has shown remarkable strength, reaching a 20-month high on Monday. It traded at 75.5 against the UAE dirham and dropped below 278 against the US dollar.

As per xe.com data, the Pakistani rupee has gained more than three percent over the last 10 months. On Monday, it traded at 277.4 against the dollar, supported by increasing foreign exchange reserves and financial backing from the International Monetary Fund (IMF) and Saudi Arabia.

Pakistan has been experiencing a steady rise in its total liquid reserves. These reserves grew from $14.75 billion in April 2025 to $22.59 billion this month, reflecting positive financial momentum.

According to the State Bank of Pakistan, the Real Effective Exchange Rate (REER) climbed to 105.8 in April 2026 compared to 104.3 in March, showcasing gradual improvement in currency valuation.

However, despite this progress, the current account balance recorded a deficit of $324 million in April 2026, following a surplus of $1.134 billion in March, as reported by the central bank.

Earlier this month, the IMF approved a $1.32 billion disbursement for Pakistan under the third review of its $7 billion extended loan facility. This has been a key factor in supporting the local currency.

Over the past year, the Pakistani rupee has stabilised noticeably. After facing significant volatility in prior years, it has traded within a relatively narrow range, mostly in the high 270s to low 280s against the dollar. This marks a major improvement compared to its record low in 2023 when it went over 300 to the dollar.

Experts believe that Pakistan’s reforms and cooperation with the IMF have played a big role in stabilising the currency. Tighter fiscal policies, energy price reforms, and a more market-based exchange-rate approach have boosted confidence among investors and international lenders. These efforts have reduced the risk of a potential default and eased the extreme pressure on the currency.

The State Bank of Pakistan’s monetary policy has also supported the rupee. By maintaining high interest rates, the central bank has managed inflation and made local investments more appealing, while discouraging the excessive demand for dollars.

Looking ahead, experts caution that any delay in IMF disbursements, rising global oil prices, or worsening political and security conditions could negatively impact the stability of the rupee.