The recent performance of the AED to PKR exchange rate indicates a stable trend, with the pair currently trading at approximately 76.32 PKR, which is near 14-day highs and only 0.5% below its three-month average of 76.67 PKR. It has maintained a consistent range of 1.5% from 76.19 to 77.32 PKR, suggesting resilience amidst broader economic developments.
Analysts attribute the relative stability of the AED to proactive measures taken by the UAE Central Bank, including the launch of a digital dirham aimed at modernizing the financial infrastructure, and recent interest rate cuts that have made loans more affordable. Despite these changes, the AED's fixed exchange rate regime with the US dollar has remained unaffected, which is a critical factor ensuring the strength of the AED in foreign exchange markets.
In contrast, the PKR has faced significant challenges, primarily driven by geopolitical tensions that have resulted in a 12% depreciation against the US dollar since January 2025. Economists predict that the PKR could decline further to around 100 PKR per USD by year-end unless the situation stabilizes. The State Bank of Pakistan has intervened by purchasing foreign reserves, attempting to support the PKR, but this has led to artificial demand rather than a sustainable recovery.
Furthermore, the crackdown on currency smuggling and efforts towards IMF-backed reforms may bolster confidence in the PKR; however, ongoing issues such as high inflation, persistent trade deficits, and political stability continue to weigh heavily on its performance. These dynamics suggest a complex interplay between domestic policies and international relations that could affect future PKR valuations.
Overall, the outlook for the AED remains comparatively stable, benefiting from strong institutional measures, while the PKR’s trajectory is fraught with uncertainty stemming from structural issues and external pressures. Investors and businesses should stay informed about these developments as they plan for future transactions involving these currencies.
