Recent developments suggest a complex landscape for the exchange rate between the UAE Dirham (AED) and the Pakistani Rupee (PKR). Analysts observe that factors such as geopolitical tensions, economic growth forecasts, and trade negotiations are shaping the outlook for the AED, while the PKR faces challenges largely stemming from external tariffs and local economic conditions.
Geopolitical tensions, notably the military actions involving Israel and Iran, have caused fluctuations in the UAE markets, which could pressure the AED in the broader Middle Eastern context. The increased oil prices resulting from these tensions may bolster the UAE's economy, but volatility remains an essential factor to consider. The Arab Monetary Fund's recent forecast indicates that the UAE's economy is expected to grow by 6.2% in 2025, driven by tourism and real estate improvements, which may lend support to the AED in the near term.
On the other hand, the PKR is grappling with headwinds from a 29% reciprocal tariff imposed by the U.S., which could stifle Pakistan's export potential. However, remittances from Pakistani migrant workers have been robust, providing a significant inflow of foreign currency during a turbulent economic period. These remittances are critical in providing support to the local economy, especially as geopolitical tensions, including India’s recent airstrike against Pakistan, exacerbate regional instability and pose risks to the PKR.
Recent price data for the AED/PKR exchange rate indicates that the AED has reached 7-day highs near 77.21, maintaining a stable range of 76.28 to 77.67 over the past three months. Forecasters believe that the current levels reflect stability, yet the outlook is intricate. The interplay of strong AED fundamentals against a backdrop of PKR vulnerabilities suggests that stakeholders considering international transactions may benefit from monitoring ongoing developments closely, as shifts in either currency's momentum could affect exchange rates significantly.
