The exchange rate between the Saudi Riyal (SAR) and the Pakistani Rupee (PKR) is currently at 30-day lows around 75.03, which is slightly below its three-month average of 75.57. Analysts indicate that this stability is within a narrow range of 1.6% from 74.89 to 76.06, suggesting a relatively consolidated performance in recent weeks.
Key developments impacting the SAR include its official peg to the U.S. dollar, fixed at 3.75 riyals per dollar. This peg provides a degree of predictability for conversions and helps maintain the riyal's stability against significant currency fluctuations in the region.
On the other hand, the PKR has faced pressures from various geopolitical and domestic factors. The closure of airspace to Indian carriers due to heightened tensions has weakened regional relations, which could negatively impact economic stability. Additionally, the central bank's decision to maintain the key interest rate at 12% amid persistent inflationary risks has drawn scrutiny. Experts note that this approach is intended to combat rising prices but may further strain economic growth.
Efforts to combat black market dollar trading have seen some success, with reported stabilization in the open market leading to a slight appreciation of the rupee. This action reflects an attempt by the Pakistani authorities to regain control over currency fluctuations exacerbated by illicit trading activities.
Moreover, a recent trade agreement with the United States focusing on energy and mining investments is being viewed positively by market analysts. This deal can potentially enhance economic cooperation, which may influence the PKR's performance against other currencies, including the SAR.
In summary, while the SAR remains stable due to its peg to the U.S. dollar, the PKR is navigating a complicated landscape of geopolitical tensions and economic policies. Hence, market observers believe that the SAR/PKR exchange rate may continue to reflect these underlying dynamics in the upcoming weeks.
