Govt Fixes Exchange Rate at Rs. 290/$ for 2025-26 Budget Amid IMF Stability Hopes
The federal government has set the exchange rate at Rs. 290 per US dollar for the upcoming 2025–26 budget, maintaining the same benchmark used in the current fiscal year. This rate will guide all budgetary calculations, including foreign debt repayments, defence imports, foreign missions, and the Public Sector Development Program (PSDP).
Despite the State Bank of Pakistan’s (SBP) projection of Rs. 299/$ for next year, the Ministry of Finance chose a more conservative figure, anticipating only a 3.6% depreciation of the Pakistani rupee amid hopes of external stability supported by the ongoing IMF program.
While the budget assumes Rs. 290/$, revised estimates for the outgoing fiscal year are now being recalculated at Rs. 280/$, compared to the current interbank rate of Rs. 281.56.
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The defence budget is expected to increase by 18%, surpassing Rs. 2.5 trillion, while external debt interest payments are estimated at Rs. 1.2 trillion. Total debt servicing could reach Rs. 8.7 trillion but may decline slightly following recent interest rate cuts.
Pakistan’s external debt stood at $130.3 billion as of March 2025, down $800 million from the prior year, largely due to reduced long-term liabilities. However, the country still needs $25 billion in the upcoming fiscal year to meet maturing external obligations.
The IMF projects that gross foreign exchange reserves will hit $17.7 billion in 2025–26, enough to cover 2.8 months of imports. Inflation is expected to ease to 7.7%, supported by a stable exchange rate.
Total national debt and liabilities reached Rs. 89.8 trillion by the end of March 2025, a 10.1% increase year-on-year, while government debt alone rose 13% to Rs. 73.7 trillion, according to SBP data.
