KARACHI: Afghanistan’s emerging situation and burgeoning import bills are keeping Pakistan’s currency under pressure which has depreciated by more than 10 percent in the last four months, said traders and analysts on Friday.
The Pak rupee did make some progress in the last two days and closed at Rs166.91 on Friday. Official data reveal the currency was hovering around the same level last year on July 29 when the country was witnessing the peak of the coronavirus pandemic.
“The situation in Afghanistan is keeping the national currency under tremendous pressure,” said Khurram Schehzad of Alpha Beta Core, a financial advisory platform. “Greenback is in a massive demand in Afghanistan since the withdrawal of the international forces.”
Local currency dealers agree with the assessment, saying about $2 million have been flowing out of the country to Afghanistan on a daily basis since the fall of Kabul.
“Afghans with dual nationality have been buying 1.5 to 2 million dollars on a daily basis from open market and taking it to their country since the American currency is now in a short supply over there,” Malik Bostan, Chairman Forex Association of Pakistan, told Arab News. “The inflow of dollars has stopped in the neighboring country, and Afghanistan's entire banking system has collapsed.”
“Previously, Pakistan received $5 million to $7 million from Afghanistan every day since currency was cheap over there and salary payments were mostly made in dollars,” he added.
Apart from the situation in Afghanistan, the Pakistani rupee is also weakening against greenback due to the country’s growing trade deficit.
Pakistan has recorded the highest trade deficit in August when its import bill stood at $6.3 billion and its export revenue was $2.25 billion, causing a trade deficit of $4.06 billion. Previously, the country had recorded its highest deficit of $3.77 billion in June 2018.
“The situation indicates that dollar is in a short supply to meet the demand of importers which is exerts a significant pressure on the national currency,” Samiullah Tariq, director research at the Pakistan-Kuwait Investment, told Arab News.
“In July, the current account deficit was $773 million, but it seems that it is going to be higher for August, though the remittance figures have yet not been released,” he added.
The State Bank of Pakistan reported on Thursday the country had $27.22 billion in foreign reserves. The country’s forex position was also strengthened since it received $2.75 billion from the International Monetary Fund (IMF) last week. However, this build-up has also failed to cool the currency market where the Pakistani rupee remains under pressure.
“The policy of the government or the central bank seems to be that it is not going to use its forex reserves to defend the rupee,” Tariq commented.
US withdrawal from Afghanistan, high import bill weaken Pakistan’s currency — traders
https://arab.news/c6y5n
US withdrawal from Afghanistan, high import bill weaken Pakistan’s currency — traders
- Local currency dealers say nearly $2 million have been flowing to Afghanistan from Pakistan on a daily basis since the international military pullout
- The Pakistani currency has lost nearly 10 percent of its value against the US dollar in the last four months
Pakistan graft survey echoes IMF warning on weak governance, public dissatisfaction
- Most Pakistanis say they were not compelled to pay bribes, but distrust remains high in anti-corruption efforts
- PM Shahbaz Sharif calls report a recognition of his government’s efforts to fight corruption, promote transparency
ISLAMABAD: Governance weaknesses flagged by the International Monetary Fund (IMF) appeared to align with findings from Pakistan’s latest corruption perception survey, analysts said on Tuesday, as Transparency International Pakistan (TI-Pakistan) reported widespread public dissatisfaction with the state’s accountability mechanisms.
TI-Pakistan’s National Corruption Perception Survey (NCPS) 2025 found that 58 percent of respondents fully or partly agreed that the IMF program and Pakistan’s removal from the Financial Action Task Force’s grey list had helped stabilize the economy.
“Encouragingly, a majority of Pakistanis (66 percent) nationwide reported that they did not experience a situation where they felt compelled to offer a bribe to access any public service,” said the survey. “Sindh recorded the highest proportion of respondents paying a bribe to access public service (46 percent), followed by Punjab (39 percent), Balochistan (31 percent) and Khyber Pakhtunkhwa (20 percent).”
In this context, 77 percent said they were unhappy with the government’s anti-corruption performance.
However, Prime Minister Muhammad Shehbaz Sharif expressed satisfaction over the report in a statement, saying “a large majority of citizens said they did not face corruption during our government’s tenure” which is “recognition of our efforts to fight corruption and promote transparency.”
“It is highly encouraging that most citizens considered the government’s measures for economic recovery to be successful,” he said.
“We worked on a priority basis to establish a system grounded in merit and transparency across all sectors of government, and we are continuing to build on these efforts,” he added.
Economist and former finance ministry adviser Dr. Khaqan Najeeb said the survey highlighted the same structural weaknesses identified by the IMF’s Governance and Corruption Diagnostic, published on Nov. 20 at the international lender’s request, which said Pakistan suffers from “persistent and widespread corruption vulnerabilities” rooted in a state-dominated economy, weak regulatory capacity, and inconsistent enforcement.
“Transparency International Pakistan’s National Corruption Perception Survey does suggest progress in reducing low-level, day-to-day bribery, but it does not contradict the IMF’s governance findings,” he told Arab News. “Instead, it highlights that Pakistan’s real challenge lies in deeper, systemic weaknesses in transparency, oversight and institutional accountability.”
“While public perception has improved, it does not mean the underlying governance issues identified by the IMF have been resolved,” he argued, adding that addressing those will require sustained reforms, stronger institutions and consistent enforcement.
Political analyst Mazhar Abbas said the report was going to be used by the government to bolster its economic narrative.
“Survey reports have usually been tilted in favor of the government, and this report is no different,” he told Arab News. “The government will certainly use it to support its narrative of an improved economy, as the report states that a majority of respondents partially or fully agree that the government has successfully stabilized the economy through the IMF agreement and by exiting the FATF grey list.”
Abbas added it was difficult to either challenge or endorse the findings of the report without knowing who was interviewed and who the respondents were.
“The police have consistently been at the top of Transparency International’s corruption perception reports, whereas there may be other organizations where the frequency and volume of corruption are even higher,” he continued, adding that since the police are a public-dealing organization and consistently top the corruption perception index, it suggested that most respondents are from the general public, who may either lack access to or knowledge of corrupt practices in other organizations.
Islamabad-based social-sector development consultant Muhammad Qasim Jan said the survey should be seen as a barometer of public sentiment rather than an empirical measure of corruption.
“The National Corruption Perception Survey 2025 offers a sobering snapshot of how Pakistanis view corruption and accountability,” he told Arab News. “At the same time, the absence of basic methodological detail means the results should be interpreted with caution, especially when citing national percentages or making population-wide claims.”
