The recent analysis of the PKR to USD exchange rate highlights a complex interplay of geopolitical tensions and economic developments affecting both currencies. For the Pakistani Rupee (PKR), recent forecasts indicate a challenging outlook, with analysts suggesting a significant depreciation. Since January 2025, the PKR has declined by 12% against the USD. Projections point to the possibility of the PKR sinking to 100 PKR/USD by year-end, driven by factors such as diminished remittances, heightened investor uncertainty, and persistent trade deficits.
However, the landscape isn't entirely bleak for the PKR. Record remittances, which reached $38.3 billion in the fiscal year 2024–25—a 26.6% increase from the prior year—have bolstered foreign exchange reserves. This influx is expected to provide some support for the currency. Additionally, a recent staff-level agreement with the International Monetary Fund (IMF) has positively affected market sentiment, contributing to slight appreciation in the PKR. Furthermore, interventions by the State Bank of Pakistan, which purchased $9 billion from the interbank market over the past nine months, have created an artificial demand for the currency, although this contradicts broader market fundamentals.
On the other side of the exchange, the US dollar (USD) has recently experienced a decline, attributed to improving risk appetite that has reduced demand for this safe-haven currency. Analysts noted that the USD was influenced by various factors, including expected inflation data that could impact Federal Reserve monetary policy. Additionally, ongoing tensions in US-China trade relations and efforts toward dedollarization add to the complexity of future movements in the USD.
As of the latest data, the PKR to USD exchange rate is approximately 0.003540, which is stable and near its three-month average, fluctuating within a narrow range of 1.2%. Analysts suggest that near-term movements in the PKR could be limited by both internal factors like remittances and external pressures such as global economic sentiment influencing the USD.
Collectively, these elements underscore the intricate dynamics in the currency markets and indicate that both the PKR and USD will continue to navigate through numerous challenges and opportunities as economic and geopolitical conditions evolve.
