AED/PKR Outlook:
The AED/PKR rate is slightly weaker, near recent lows and just below its 3-month average. Currently, there is no clear driver supporting a rise.
Key drivers:
• Rate gap: The UAE Central Bank maintains a stable policy, while the SBP's measures for improving foreign exchange reserves create a contrasting landscape.
• Risk/commodities: With oil prices being volatile, the PKR can be affected as oil is vital for Pakistan’s economy, which relies heavily on oil revenue.
• One macro factor: The anticipated IMF visit is generating some positive outlook for the PKR, but uncertainty remains due to ongoing geopolitical tensions.
Range:
Expect the AED/PKR to test the recent low and move within a stable range, possibly drifting slightly lower.
What could change it:
• Upside risk: A significant inflow from remittances could strengthen the PKR.
• Downside risk: Continued geopolitical tensions could weaken the PKR further, affecting its stability.