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Rupee Pressure Builds as Pakistan’s External Gap Widens

Tighter dollar purchase limits have not prevented a growing gap that leaves the rupee exposed.

Overview

  • The current account deficit reached $733 million in the first four months of FY26, up from $206 million a year earlier.
  • Imports rose 10% to $24.92 billion while exports increased 4.8% to $13.66 billion, taking the trade deficit to $11.26 billion.
  • Remittances grew 9.3% to $12.96 billion but remained insufficient to cover the widening external gap.
  • The State Bank of Pakistan tightened restrictions on individual dollar purchases in an effort to stabilize the currency.
  • The real effective exchange rate rose to 103.95 in October as the rupee held near 280 per dollar, fueling overvaluation concerns and prompting exporters to call for a gradual adjustment and cost relief.