Govt Planning Upcoming Budget At Rs. 290/$

The federal government has fixed the exchange rate at Rs. 290 per US dollar for the 2025-26 federal budget.

Authorities see a 3.6 percent depreciation for PKR on expectations of external stability under the ongoing International Monetary Fund (IMF) program.

The Rs. 290/$ rate will apply to all budget estimates, including foreign debt servicing, defence imports, foreign missions, and the Public Sector Development Program (PSDP).

The same rate was used for the current year’s budget, though actual performance was more stable. Revised estimates for the outgoing fiscal year are now being calculated using Rs. 280/$, while the interbank rate on Monday was Rs. 281.56.

The defence budget is being increased by 18 percent to over Rs. 2.5 trillion. External debt interest payments are projected at Rs. 1.2 trillion, with total debt servicing at Rs. 8.7 trillion. This may be revised downward following the recent interest rate cut.

Despite the State Bank of Pakistan’s (SBP) projection of Rs. 299/$ for next year, the finance ministry has opted for Rs. 290/$.

The IMF projects gross reserves to reach $17.7 billion in 2025-26 and cover 2.8 months of imports. Inflation is forecast at 7.7 percent supported by the stable exchange rate forecast.

Pakistan’s external debt stood at $130.3 billion at end-March 2025, down $800 million from the previous year, mainly due to lower long-term liabilities. However, $25 billion will be needed in 2025-26 for maturing external obligations.

Total debt and liabilities rose to Rs. 89.8 trillion by end-March, up 10.1 percent year-on-year. Meanwhile, government debt rose 13 percent to Rs. 73.7 trillion, per latest SBP data.