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The US dollar is likely to surge against the Pakistani rupee, after Fitch Ratings predicted a controlled depreciation of the local currency by the State Bank of Pakistan (SBP) to manage economic pressures and a growing current account deficit.
According to Bloomberg, Fitch forecasts the rupee to fall to 285 per dollar by the end of June and further weaken to 295 by the end of fiscal year 2026. This projection was shared by Krisjanis Krustins, Director for Asia Pacific Sovereign Ratings at Fitch.
“We understand that the state bank is reasonably concerned about that,” Krustins noted during a Fitch webinar on Tuesday. “While they’re managing that by holding onto higher rates for longer, we think they’ll also manage that by allowing a bit more currency depreciation.”
So far in 2025, the rupee has already slipped 0.7%, making it one of the weaker currencies in the region, based on Bloomberg data.
The potential surge of the dollar against the rupee is being seen as part of a broader strategy by the SBP to avoid overheating the economy while ensuring sustainable growth.
While market observers react to the forecast, the State Bank of Pakistan has yet to comment on the outlook presented by Fitch.
