US currency's value drops in relation to Indian rupee
Strengthening US Dollar Causes Moderate Depreciation of Pakistani Rupee
In the past few months, the US Dollar (USD) has shown a strengthening trend against the Pakistani Rupee (PKR). The USD to PKR exchange rate, which was roughly 276 PKR per USD in early March 2025, has moved to around 279–283 PKR per USD by August 2025.
During this period, the PKR to USD rate (inverted) shows a slight weakening of PKR's value against the USD, with values around 0.0034 to 0.0036 USD per PKR.
The strengthening of the USD can be attributed to several factors. As a global reserve and safe haven currency, the USD tends to strengthen in times of global uncertainty or monetary policy tightening by the US Federal Reserve. The US Federal Reserve's monetary policy, including interest rate decisions and inflation data, also significantly impact the USD’s strength.
Domestic factors such as inflation, fiscal deficits, foreign exchange reserves, and political stability in Pakistan also heavily influence PKR valuation. Pakistan's economic challenges and demand for imports can add depreciation pressure on PKR.
International commodity prices and trade also play a role. Pakistan’s import costs for energy and commodities can affect its currency. Capital flows and geopolitical risks also influence currency confidence and USD-PKR dynamics.
Recent developments include a decline in oil prices, with Brent crude dropping to $68.50 a barrel and U.S. West Texas Intermediate crude declining to $66.07 on Monday. There is concern among traders about the possibility of further sanctions on Russia affecting oil prices.
In the local market, the PKR closed at 282.72 against the US dollar on Monday, according to the State Bank of Pakistan (SBP). In the inter-bank market, the PKR was quoted at BID Rs 282.66 for buying and OFFER Rs 282.85 for selling against the US dollar. In the open market, the PKR gained 16 paise for buying and 5 paise for selling against the US dollar, closing at 284.46 and 285.25, respectively.
However, against other currencies, the PKR performed differently. Against UAE Dirham, the PKR gained 5 paise for buying and 10 paise for selling, closing at 77.40 and 77.60, respectively. Against Euro, the PKR lost 4.46 rupees for buying and 4.50 rupees for selling, closing at 328.65 and 330.30, respectively.
Data on Friday showed US employment growth undershot expectations in July, which may have contributed to the USD's strength. An unexpected resignation by Fed Governor Adriana Kugler has also opened the door for President Donald Trump to make an imprint on the central bank.
[1] Trading Economics. (2025). Pakistan Rupee to US Dollar Exchange Rate. [online] Available at: https://tradingeconomics.com/pakistan/inflation-cpi
[2] Reuters. (2025). Factbox: What's driving the dollar's strength? [online] Available at: https://www.reuters.com/article/us-dollar-strength-factbox/factbox-whats-driving-the-dollars-strength-idUSKBN27W23K
[3] State Bank of Pakistan. (2025). Exchange Rate Data. [online] Available at: https://www.sbp.gov.pk/exchange-rate-data
[4] Bloomberg. (2025). Pakistan Rupee. [online] Available at: https://www.bloomberg.com/quote/PKR:PKR
- The growth of the US dollar's strength can be linked to factors such as monetary policy tightening by the US Federal Reserve, global uncertainty, and interest rate decisions.
- Internationally, Pakistan's import costs for energy and commodities, like oil, can impact the Pakistani Rupee's (PKR) value, as shown by the recent decline in oil prices.
- Traders are concerned about the possibility of further sanctions on Russia affecting oil prices and, consequently, their trading options in the energy industry.
- In the finance industry, the PKR closed at 282.72 against the US dollar on a specific day, but performed differently against other currencies, such as UAE Dirham and Euro.
- Unusual events, like an unexpected resignation of a Federal Reserve Governor, can have an impact on the growth of the US dollar, as it recently did by opening the door for President Trump to potentially influence the central bank.
