KARACHI: Pakistan has devalued its national currency, the Pakistani Rupee (PKR), for the fifth time since December 2017, as the country faces mounting pressure over external payments amid diminishing foreign-exchange reserves.
“Today, the exchange rate in the interbank market closed at PKR 133.64 to the US dollar, against the previous day’s closing of PKR 124.27 to the US dollar,” the State Bank of Pakistan said on October 9. “This movement broadly reflects the current-account dynamics and also the demand-supply gap in the foreign-exchange market.
“Although the current-account deficit narrowed in August 2018, a consistent increase in the oil-import bill, on account of rising international oil prices, has exerted pressure in the foreign-exchange market.”
Pakistan has, after much delay, finally decided to approach the International Monetary Fund for help, but the rupee is expected to remain under further pressure this week, with currency experts predicting that a sixth round of devaluation is inevitable as a prerequisite for IMF assistance.
“The rupee was overvalued as compared with dollar and the correction was overdue,” said Zeeshan Afzal, executive director of research at Insight Securities. “It is no coincidence that the rupee devaluation has come at a time when Pakistan has formally announced an approach to the IMF for a bailout package.”
Pakistani Finance Minister Asad Umar on Monday announced the country will approach the IMF for assistance, after foreign-exchange reserves declined to $8.4 billion by September 28.
Information Minister Fawad Chaudhry on Tuesday said turning to the IMF was a “difficult decision.”
He told guests at an event in Islamabad: “The country’s remaining reserves can only serve for one month and 16 days, while the country needs $8 billion for debt servicing. We need $28 billion to run the country for this year.”
However, experts believe that the country’s growth will slow after an IMF intervention.
“The IMF program will come with specific external, fiscal and monetary measures that are likely to slow gross domestic product growth to about 4 to 4.5 percent,” said Saad Hashmey, an analyst at Topline Securities.
The Pakistan stock market reacted strongly to the government’s decision to opt for an IMF program for stabilization and economic recovery, with the benchmark KSE 100 index recovering 606 points.
“Oil and banking stocks outperformed on surging global oil prices and higher banking spreads,” said Ahsan Mehanti, chief executive of Arif Habib Group. “The auto, steel and cement sectors underperformed on a weak earnings outlook, record rupee depreciation and the likely curtailment of China-Pakistan Economic Corridor projects. Late-session buying on likely economic stability post-IMF bailout played a catalyst role in a bullish close.”
This is the fifth round of rupee devaluations since December last year. The government has devalued the currency from PKR 105 against the dollar on December 8, 2017, to PKR 135 on October 09, 2018, making it 27 percent weaker.
“We expect that the currency will further depreciate by up to 5 percent before the country goes to the IMF program,” Afzal said.
Fahad Irfan, head of research at Alfalah Securities, said: “We see the rupee further depreciating to PKR 140 against (the dollar) because the pace of depletion of foreign-exchange reserves is accelerating.”
that the rupee was not adjusted with a basket of other currencies when peer countries took corrective measures, which is why it remains under pressure.
As the devaluation is expected to increase inflationary pressure, analysts expect the State Bank of Pakistan will increase its interest rate from the current 8.5 percent in the next monetary policy announcement.
Junaid Esmail Makda, president of the Karachi Chamber of Commerce and Industry, expressed deep concerns about the serious devaluation of rupee against dollar, saying it will have a devastating effect on all segments of society, particularly middle- and lower-income groups, with the poor likely to particularly suffer as a result of rising inflation.
The central banks said it will continue to closely monitor foreign-exchange markets and stands ready to ensure stability in the financial markets and curb the emergence of speculative pressures.
Pak Rupee plunges to all time low at 133.6 against Dollar ahead of IMF bailout plan
Pak Rupee plunges to all time low at 133.6 against Dollar ahead of IMF bailout plan
- Pak Rupee is still overvalued, might undergo another 5 percent devaluation to PKR 140, say financial experts
- Pakistan needs $8 billion to service its debts and $28 billion to run its financial affairs for the current year
What MENA’s wild 2025 funding cycle really revealed
RIYADH: The Middle East and North Africa startup funding story in 2025 was less a smooth arc than a sequence of sharp gears: debt-led surges, equity-led recoveries, and periodic quiet spells that revealed what investors were really underwriting.
By November, the region had logged repeated bursts of activity — culminating in September’s $3.5 billion spike across 74 deals — yet the year’s defining feature was not just the size of the peaks, but the way capital repeatedly clustered around a handful of markets, instruments, and business models.
Across the year’s first eleven months, funding totals swung dramatically: January opened at $863 million across 63 rounds but was overwhelmingly debt-driven; June fell to just $52 million across 37 deals; and September reset expectations entirely with a record month powered by Saudi fintech mega facilities.
The net result was a market that looked expansive in headline value while behaving conservatively in underlying risk posture — often choosing structured financing, revenue-linked models, and geographic familiarity over broad-based, late-stage equity appetite.
Debt becomes the ecosystem’s shock absorber
If 2024 was about proving demand, 2025 was about choosing capital structure. Debt financing repeatedly dictated monthly outcomes and, in practice, became the mechanism that let large platforms keep scaling while equity investors stayed selective.
January’s apparent boom was the clearest example: $863 million raised, but $768 million came through debt financing, making the equity picture almost similar to January 2024.
The same pattern returned at larger scale in September, when $3.5 billion was recorded, but $2.6 billion of that total was debt financing — dominated by Tamara’s $2.4 billion debt facility alongside Lendo’s $50 million debt and Erad’s $33 million debt financing.
October then reinforced the playbook: four debt deals accounted for 72 percent of the month’s $784.9 million, led by Property Finder’s $525 million debt round.
By November, more than half the month’s $227.8 million total again hinged on a single debt-backed transaction from Erad.
This isn’t simply ‘debt replacing equity.’ It is debt acting as a stabilizer in a valuation-reset environment: late-stage businesses with predictable cash flows or asset-heavy models can keep expanding without reopening price discovery through equity rounds.
A two-speed geography consolidates around the Gulf
The regional map of venture capital in 2025 narrowed, widened, then narrowed again — but the center of gravity stayed stubbornly Gulf-led.
Saudi Arabia and the UAE alternated at the top depending on where mega deals landed, while Egypt’s position fluctuated between brief rebounds and extended softness.
In the first half alone, total investment reached $2.1 billion across 334 deals, with Saudi Arabia accounting for roughly 64 percent of capital deployed.
Saudi Arabia’s rise was described as ‘policy-driven,’ supported by sovereign wealth fund-backed VC activity and government incentives, with domestic firms such as STV, Wa’ed Ventures, and Raed Ventures repeatedly cited as drivers.
The UAE still posted steady growth in the first half — $541 million across 114 startups, up 18 percent year-on-year — but it increasingly competed in a market where the largest single cheques were landing elsewhere unless the Emirates hosted the region’s next debt mega round.
The concentration became stark in late-year snapshots. In November, funding was ‘tightly concentrated in just five countries,’ with Saudi Arabia taking $176.3 million across 14 deals and the UAE $49 million across 14 deals, while Egypt and Morocco each sat near $1 million and Oman had one undisclosed deal.
Even in September’s record month, the top two markets — Saudi with $2.7 billion across 25 startups and the UAE with $704.3 million across 26 startups — absorbed the overwhelming majority of capital.
A smaller but notable subplot was the emergence of ‘surprise’ markets when a single deal was large enough to change rank order.
Iraq briefly climbed to third place in July on InstaBank’s $15 million deal, while Tunisia entered the top three in June entirely via Kumulus’ $3.5 million seed round.
These moments mattered less for the totals than for what they suggested: capital can travel, but it still needs an anchor deal to justify attention.
Events, narrative cycles, and the ‘conference effect’
2025 also showed how regional deal flow can bunch around events that create permission structures for announcements.
February’s surge — $494 million across 58 deals — was explicitly linked to LEAP 2025, where ‘many startups announced their closed deals,’ helping push Saudi Arabia to $250.3 million across 25 deals.
September’s leap similarly leaned on Money20/20, where 15 deals were announced and Saudi fintechs dominated the headlines.
This ‘conference effect’ does not mean deals are created at conferences, but it does change the timing and visibility of closes.
Sector leadership rotates, but utility wins
Fintech retained structural dominance even when it temporarily lost the top spot by value.
It led January on the back of Saudi debt deals; dominated February with $274 million across 15 deals; remained first in March with $82.5 million across 10 deals; topped the second quarter by capital raised; and reclaimed leadership in November with $142.9 million across nine deals — again driven by a debt-heavy transaction.
Even when fintech fell to ninth place by value in October with $12.5 million across seven rounds, it still remained ‘the most active sector by deal count,’ a sign of persistent baseline demand.
Proptech was the year’s other headline sector, but its peaks were deal-specific. Nawy’s $75 million round in May helped propel Egypt to the top that month and pushed proptech up the rankings.
Property Finder’s debt round in October made proptech the month’s top-funded sector at $526 million. In August, proptech led with $96 million across four deals, suggesting sustained investor appetite for real-estate innovation even beyond the megadeal.
Outside fintech and proptech, the year offered signals rather than dominance. July saw deeptech top the sector charts with $250.3 million across four deals, reflecting a moment of investor appetite for IP-heavy ventures.
AI repeatedly appeared as a strategic narrative — especially after a high-profile visit by US President Donald Trump alongside Silicon Valley investors and subsequent GCC AI initiatives — yet funding didn’t fully match the rhetoric in May, when AI secured just $25 million across two deals.
By late year, however, expectations were already shifting toward mega rounds in AI and the industries built around it, positioning 2025 as a runway-building year rather than a breakout year for AI funding in the region.
Stage discipline returns as valuations reset
In 2025, MENA’s funding landscape tried to balance two priorities: sustaining early-stage momentum while selectively backing proven scale. Early-stage rounds dominated deal flow. October saw 32 early-stage deals worth $95.2 million, with just one series B at $50 million. November recorded no later-stage rounds at all, while even September’s record month relied on 55 early-stage startups raising $129.4 million.
When investors did commit to later stages, the cheques were decisive. February featured Tabby’s $160 million series E alongside two $28 million series B rounds, while August leaned toward scale with $112 million across three series B deals. Late-stage equity was not absent — it was episodic, appearing only when scale economics were defensible.
B2B models remained the default. In the first half, B2B startups raised $1.5 billion, or 70 percent of total funding, driven by clearer monetisation and revenue visibility.
The gender gap remained structural. Despite isolated spikes, capital allocation continued to overwhelmingly favour male-led startups.
What 2025 actually said about 2026
Taken together, 2025 looked like a year of capital market pragmatism. The region demonstrated capacity for outsized rounds, but much of that capacity ran through debt, a handful of megadeals, and a narrow set of markets — primarily Saudi Arabia and the UAE.
Early-stage deal flow stayed active enough to keep the pipeline moving, even as growth-stage equity became intermittent and increasingly selective.
By year-end, the slowdown seen in November read less like a breakdown than a deliberate pause: a market in consolidation mode preserving firepower, waiting for clearer valuation anchors and the next wave of platform-scale opportunities.
If 2025 was about proving the region can absorb large cheques, 2026 is shaping up to test where those cheques will go — especially as expectations build around AI-led mega rounds and the industries that will form around them.
