The SAR to PKR exchange rate has recently experienced fluctuations, reaching 14-day highs near 74.73. This places it just 0.6% below its three-month average of 75.14, with the rate showing stability within a 2.0% range from 74.57 to 76.06. Analysts suggest that the fixed peg of the Saudi riyal to the U.S. dollar at 3.75 riyals per dollar contributes to a relatively stable SAR, which serves as a backdrop to the more volatile PKR.
The Pakistani rupee has faced significant headwinds due to ongoing geopolitical tensions, resulting in a 12% depreciation against the U.S. dollar since January 2025. Experts forecast the PKR could depreciate further, potentially reaching 100 PKR per U.S. dollar by the end of the year. These tensions have created a detrimental impact on currency stability, leading to increased forecasts of further declines.
Compounding these issues, the State Bank of Pakistan has actively intervened, purchasing $9 billion from the interbank market to bolster reserves. However, such measures have been described as creating artificial demand, as they may not sustainably address the underlying factors affecting the PKR's value.
Additionally, a crackdown on currency smuggling has provided temporary support for the rupee, as measured demand increases. Despite these efforts, the long-term outlook remains uncertain. Economists note that ongoing IMF-backed reforms, which aim to stabilize the currency and reduce fiscal deficits, could attract some foreign inflows, but the high-interest rate environment also poses challenges to domestic borrowing.
Overall, while the SAR remains stable, the PKR continues to be affected by a complex mix of geopolitical tensions, central bank actions, and economic policies. Given these dynamics, individuals and businesses engaging in international transactions should remain vigilant and consider these factors when planning for future currency exchanges.
