The federal government has set Rs290 to a dollar as the benchmark exchange rate for the FY2026-27 budget, indicating a nominal depreciation of about 3.5 per cent over the next fiscal year.

The rate will be used to estimate foreign loan repayments, defence imports and dollar-denominated revenue heads. Officials said the figure reflects the government's confidence in meeting roughly $21 billion in external debt obligations through a mix of rollovers and fresh inflows.

Independent economists noted that the assumption looks optimistic given persistent pressure on the current account, but conceded that real-effective exchange-rate adjustment is no longer the policy lever it once was.