SAR/PKR Outlook: Slightly weaker, but likely to move sideways, as the rate is just below its recent average and within a stable range.
Key drivers:
- Rate gap: The Saudi central bank's stable policy maintains the SAR's value, while the State Bank of Pakistan’s recent rate hold signals challenges for the PKR.
- Risk/commodities: The recent rise in oil prices generally strengthens the SAR, but volatility in global markets can create uncertainty for the PKR.
- One macro factor: Fitch Ratings forecasts indicate that the PKR could weaken significantly by mid-2026 due to current account pressures, which could affect confidence in the currency.
Range: The SAR/PKR is likely to drift within its recent 3-month range, as immediate external pressures are limited.
What could change it:
- Upside risk: A significant rise in oil prices could boost the SAR.
- Downside risk: Any unexpected deterioration in Pakistan’s economic outlook may lead to increased depreciation of the PKR.
