The Pakistani rupee could weaken further against the US dollar after the International Monetary Fund advised Pakistan to adjust its exchange rate in line with the Real Effective Exchange Rate.
During ongoing discussions with Pakistani authorities, the IMF recommended bringing the exchange rate closer to REER levels so that the currency better reflects the country’s economic fundamentals.
Officials familiar with the talks said such an adjustment could result in the rupee declining to around Rs. 290 to Rs. 300 per US dollar, compared with the current level near Rs. 280.
The suggestion comes as Pakistan continues negotiations with the IMF over economic reforms while also preparing the upcoming federal budget.
Economists note that a weaker currency could help boost export competitiveness, making Pakistani goods cheaper in international markets. However, it may also increase inflationary pressure by raising the cost of imported items such as fuel, machinery, and industrial raw materials.
Pakistan has been working with the IMF to stabilize its economy through fiscal discipline and structural reforms, including steps aimed at improving tax collection and maintaining a market-based exchange rate policy.
