The current market bias for the AED to PKR exchange rate is range-bound.
Key drivers include:
- The interest rate differential, where UAE rates are relatively higher compared to Pakistan, supporting the AED's value.
- Improved fiscal management and steady remittance inflows in Pakistan may mitigate sharp PKR depreciation.
- The UAE's economic growth is projected to remain strong, particularly in non-hydrocarbon sectors, further bolstering the AED.
The near-term range is expected to maintain stability, with rates likely trading within a narrow band around recent levels.
An upside risk could come from accelerated growth in UAE leading to an even stronger Dirham, while a downside risk involves Fitch's projection of PKR depreciation against major currencies, creating potential volatility in the exchange rate.
Stay attuned to these currency developments for better transaction decisions.