The exchange rate between the Saudi Arabian Riyal (SAR) and the Pakistani Rupee (PKR) has remained relatively stable in recent weeks. Currently, the SAR to PKR exchange rate stands at approximately 75.36, which is close to its three-month average. This stability reflects a narrow trading band between 74.89 and 76.06, indicating a low volatility environment.
However, the outlook for the PKR remains challenging due to ongoing geopolitical tensions. Reports indicate that the PKR has depreciated by 12% against the USD since the beginning of the year, with predictions suggesting that it may weaken further, reaching around 100 PKR per USD by early 2026. Analysts attribute this anticipated decline primarily to border closures and trade disruptions with neighboring countries.
The State Bank of Pakistan's efforts to bolster the rupee through significant foreign exchange market interventions, purchasing $9 billion to stabilize reserves, underscore the seriousness of the situation. This move represents about 1.7% of the country’s GDP, highlighting the central bank's commitment to currency stability amid increasing pressures.
Furthermore, the recent IMF loan secured by Pakistan introduces pathways for long-term economic reforms, which may stabilize the rupee over time. While these reforms aim to enhance tax collection and curb overspending, they could initially contribute to inflation, complicating the short-term recovery process for the PKR.
On the other hand, measures like the crackdown on illegal currency trading by Pakistan's intelligence agency have shown some positive effects, as this initiative helps to stabilize the PKR by reducing speculative pressure on the currency.
In summary, while the SAR maintains a stable exchange rate against the PKR, the latter faces significant downward pressures influenced by geopolitical issues and the need for stricter fiscal policies. Traders and businesses should remain vigilant, as the evolving situation may result in fluctuations that could impact international transaction costs as the currency landscape unfolds over the coming months.
