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As FY26 closed on June 30, the rupee ended the year at Rs278.16 against the US dollar in the interbank market, according to the State Bank of Pakistan (SBP).
For much of the year, the exchange rate remained confined to a remarkably narrow range, projecting a degree of stability rarely seen in recent years. Yet beneath this calm lies a more complex reality. The rupee’s resilience has rested less on a structural strengthening of the external sector than on a combination of official inflows, prudent monetary management and continued administrative oversight of the foreign exchange market.
The broader macroeconomic environment has nevertheless improved. Reflecting this improving but still uncertain environment, the SBP kept its policy rate unchanged at 11.5 per cent in June, signalling its commitment to containing inflationary expectations without unnecessarily restraining a still-fragile economic recovery.
The external sector presents an equally mixed picture. As of June 24, SBP foreign exchange reserves had declined to about $16.53 billion from around $17.19bn at the end of May following scheduled external debt repayments. Total liquid reserves, including commercial bank holdings, stood slightly over $22bn.
