SAR/PKR Outlook: Likely to decrease, as the rate is below its recent average and near its recent lows, reflecting pressures from the PKR's stabilization efforts and broader economic challenges.
Key drivers:
• Rate gap: The Saudi Arabian central bank maintains a stronger position compared to the Pakistan central bank, which is managing a gradual depreciation of the PKR.
• Risk/commodities: Current oil prices are relatively stable but below past highs, which can impact the SAR more significantly than the PKR.
• One macro factor: Recent reports indicate that the PKR is expected to see a minor, gradual depreciation in 2026, with ongoing economic reforms likely influencing its stability against currencies like the SAR.
Range: SAR/PKR is expected to hold within a stable 1.7% range, as it consolidates near recent lows.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen the SAR against the PKR.
• Downside risk: Further deterioration in Pakistan's economic outlook may add more pressure on the PKR.
