Pakistan’s exchange rate is facing new pressure as the current account deficit grows quickly. Imports are rising much faster than exports, which increases the gap and weakens stability. Even though remittances remain strong, they cannot offset the widening imbalance. As a result, expectations are rising that the rupee may eventually adjust despite the State Bank’s strict controls.
Exports remain weak as many exporters blame a controlled exchange rate for hurting competitiveness. Meanwhile, India’s currency has fallen sharply due to high US tariffs, raising concerns that Pakistan’s currency is becoming overvalued. Import growth, driven by relaxed restrictions and recovering demand, has expanded the trade deficit sharply. Rising imports and stagnant exports continue to push the current account deeper into trouble.
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Remittances have increased, but they are not enough to control the pressure on the external sector. Analysts warn that Pakistan remains highly vulnerable to global commodity price changes. Past crises show that the country depends too much on imports and borrowed foreign exchange. Experts argue that the core issue is structural weakness, not temporary shocks. They call for a stronger and more productive export base.
Exporters insist that long-term growth requires a shift toward productivity and an export-led model. However, they also warn that the government’s tight control of the exchange rate destroys competitiveness and hurts market share. They criticize the State Bank for creating an artificial sense of stability. According to them, gradual and natural adjustments help, while long periods of control followed by big devaluations cause inflation and economic shocks.
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Many experts say the government has limited choices if it wants to keep the exchange rate stable without damaging exports. Lower interest rates and cheaper energy for exporters may be needed. They warn that delaying necessary currency adjustments will only worsen the damage. They urge the government to act before the pressure on the exchange rate becomes unmanageable.