The current market bias for the PKR to USD exchange rate is bearish.
Key drivers include:
• The Federal Reserve is expected to implement rate cuts by mid-2026, which may weaken the USD.
• Improved fiscal management and steady remittance inflows in Pakistan could strengthen the PKR’s position.
• Fitch Ratings forecasts gradual depreciation of the PKR, reaching 285 to the USD by mid-2026, driven by current account pressures.
The near-term trading range is expected to fluctuate within a stable band, reflecting recent trading patterns.
An upside risk is the successful privatization of Pakistan International Airlines, potentially improving economic confidence. Conversely, a downside risk is the projected decline of the USD due to Federal Reserve policies, which may enhance demand for USD in the international market.