Government projects stronger rupee for upcoming budget, eyes Rs 1.4 trillion debt relief

The federal government has set the exchange rate at Rs290 per dollar for the upcoming fiscal year’s budget, slightly stronger than the current year’s rate of Rs295. This adjustment aims to improve the accuracy of foreign aid, loan repayments, and other financial calculations in local currency.

With interest payments on debt projected to reach Rs8.5 trillion, experts believe a stronger rupee and lower policy rates could help reduce the overall debt servicing burden. Estimates suggest that Pakistan may save over Rs1.4 trillion in debt payments compared to the current fiscal year.

As part of its fiscal planning, the government is beginning virtual budget discussions with the International Monetary Fund (IMF) today. An IMF delegation is expected to visit Pakistan next week for in-person negotiations. Officials remain optimistic about constructive and smooth talks as they present key budget proposals.

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