The GBP to PKR exchange rate appears range-bound in the near term.
Key drivers include:
- The Bank of England is expected to cut interest rates to 3.25% by mid-2026, while the Federal Reserve's rate adjustment plans indicate a more cautious approach.
- Recent improvements in Pakistan's economic environment, including a consistent appreciation of the PKR against the USD, contribute positively.
- Inflation in the UK is projected to decline, impacting the BoE's monetary policy approach, while growth is forecast to slow.
In the coming months, GBP to PKR is expected to trade within a stable range.
An upside risk is a stronger-than-expected rebound in the UK economy, prompting less aggressive rate cuts from the BoE. Conversely, a downside risk stems from potential shifts in U.S. monetary policy that could strengthen the dollar and pressure the GBP downward. Analysts note that the current GBPPKR rate of 377.0 is only slightly above its recent average, indicating limited volatility.