Recent developments indicate a nuanced outlook for the AED to PKR exchange rate amidst varying pressures on both currencies. As of now, the AED trades near 90-day lows at approximately 76.39 PKR, marginally below its 3-month average of 76.92, reflecting a stable trading range of about 1.3%.
The UAE Dirham's stability is aided by a recent currency swap agreement with Turkey, aimed at enhancing liquidity and facilitating transactions between the two nations. This agreement, valued at 18 billion AED, may bolster investor sentiment toward the AED. Furthermore, a recent interest rate cut by the UAE Central Bank has stimulated the local stock market and could indirectly sustain demand for the Dirham.
In contrast, the Pakistani Rupee faces several challenges. Geopolitical tensions have driven a significant 12% depreciation against the US dollar since the beginning of 2025, with forecasts predicting it may reach 100 PKR/USD by year-end. While record remittances totaling $38.3 billion have provided some support to the PKR, they are not enough to counterbalance the detrimental effects of reduced foreign investment and a widening trade deficit.
The imposition of a staff-level agreement with the International Monetary Fund has slightly assuaged market concerns, leading to short-term strengthening of the PKR. However, interventions by the State Bank of Pakistan, purchasing $9 billion in the past nine months, indicate an artificial support mechanism that diverges from market fundamentals.
Overall, analysts suggest that while the AED maintains a relatively strong position due to supportive developments in the UAE, the PKR's outlook remains influenced by geopolitical uncertainties and economic challenges. Thus, businesses and individuals engaged in exchange should closely monitor these factors, as they will ultimately impact transaction costs and remittance values in the coming months.
