Fitch ratings estimate- By June 2025, Pakistani rupee will weaken and come to 285 against the dollar.

Pakistan Economy: Fitch Ratings has said in one of its recently imposed estimates that the Central Bank of Pakistan can allow the Pakistani rupee to fall to deal with any type of external pressure as the country’s economic activities are gaining momentum. Christians Crustins, director of Sovereign Ratings at International Rating Agency Fitch, has estimated to fall to Rs 285 per US dollars by June 2025 and to come to Rs 295 by the end of FY 26.

This will happen when the currency is weak

Fitch has said, Pakistan’s Central Bank will gradually weaken the rupee to reduce the pressure on the current account with the speed of the economy. In the first week of September 2023, the Pakistani rupee went to an all-time low level of Rs 307.10 against the US dollar amid increasing cases of dollar smuggling in neighboring countries from Pakistan.

After this, the action of the government on illegal currency dealers helped the Pakistani rupee reach about Rs 277 per US dollars in the first half of 2024. Fitch also admitted that if the currency is weak, the expenditure on imports will increase more, but it will help reduce the business deficit and support the reserve buffer.

Pakistan’s Sovereign Credit rating upgrade

Last year, after avoiding the country’s default, the fall in oil prices and better confidence has strengthened economic improvement. Prime Minister Shahbaz Sharif’s government has obtained several installments from the IMF and Fitch has recently upgraded Pakistan’s Sovereign Credit rating in response to continuous improvement efforts.

Decreased country’s foreign exchange reserves

Meanwhile, State Bank of Pakistan Governor Jamil Ahmed said last week that Pakistan’s foreign exchange reserves have fallen by $ 2 billion due to compensation for foreign loans for the last few months, which has reduced the total reserves to $ 10.6 billion. However, by the end of June, Pakistan will receive $ 4-5 billion from external sources including funds received from global financial institutions.

Due to this, by the end of June, the foreign exchange reserves will reach $ 14 billion, which is more than an earlier estimate of $ 13 billion. He said that imports increased to $ 5.7 billion in March, which is a sign of a boom in economic activities. The governor also estimated that in FY 2025, the economy here would increase by 3 percent, while in FY 2024 it was 2.5 percent.

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