Govt Sets Dollar at Rs. 290 for FY2026-27 Budget Planning
The federal government has adopted an exchange rate of Rs. 290 per US dollar for budget planning in FY2026-27, indicating expectations of a modest weakening of the rupee in the coming year despite its recent stability.
The Finance Ministry has directed all ministries and divisions to use the Rs. 290 exchange rate when preparing budget estimates, calculating foreign-funded projects, assessing external loans and grants, and finalizing development expenditure plans for the next fiscal year.
The new benchmark is around Rs. 10 higher than the rate used for revised estimates in the current fiscal year, reflecting a depreciation of roughly 3.5 percent. The assumption comes even though the rupee has remained relatively stable and was trading near Rs. 278.4 per dollar in the interbank market.
The exchange rate plays a critical role in federal budgeting because it affects foreign debt repayments, defense-related imports, overseas missions, and development projects financed through external funding.
Government projections show that federal and provincial authorities are expected to secure about $3.2 billion, equivalent to nearly Rs. 927 billion, in foreign project financing during FY2026-27. This accounts for more than 20 percent of the country’s estimated combined development budget of around Rs. 4.3 trillion.
The budget preparations are taking place amid significant external financing requirements. IMF estimates indicate that Pakistan will need approximately $21.2 billion in external financing during FY2026-27, with requirements potentially increasing to about $30 billion in FY2027-28.
Officials, however, remain confident about meeting these obligations. According to sources, the Prime Minister’s Office recently reviewed the country’s external financing outlook and was informed that projected funding needs remain manageable.
The government is targeting a current account deficit of around 0.7 percent of GDP, or roughly $3.6 billion, next fiscal year. At the same time, interest payments on external debt are expected to approach Rs. 1.1 trillion, while total debt servicing costs could rise to nearly Rs. 7.8 trillion.
