The exchange rate between the Saudi Riyal (SAR) and the Pakistani Rupee (PKR) has recently shown signs of stability, currently trading near 90-day lows at approximately 74.70 PKR per SAR. This marks a slight decline from the three-month average of 75.26, within a relatively narrow range of 74.70 to 76.06. Analysts note that the SAR's fixed rate against the U.S. dollar at 3.75 remains strong, supporting its stability in international markets.
However, the outlook for the PKR is fraught with challenges. Geopolitical tensions have exacerbated depreciation pressures, with the PKR losing around 12% against the U.S. dollar since the start of 2025. Experts predict further declines, potentially reaching 100 PKR per USD by year-end, primarily driven by ongoing political instability in the region.
Central bank interventions have had a mixed impact on the PKR's value. The State Bank of Pakistan has engaged in significant currency purchases to bolster reserves, which has somewhat artificially supported the rupee. Simultaneously, a crackdown on currency smuggling has led to temporary strengthening. Nevertheless, underlying economic vulnerabilities remain, particularly due to high interest rates aimed at attracting foreign investment that also strain domestic liquidity.
Moreover, the ongoing engagement with the IMF to implement reforms intended to stabilize fiscal deficits and the currency itself could introduce both volatility and opportunities for investors navigating the SAR/PKR pair.
Overall, while the SAR remains a stable currency amid its pegged arrangement, the PKR faces substantial obstacles that could create a widening gap between these two currencies in the near future. Currency traders and businesses engaging in international transactions should remain cautious and informed about these dynamics.
