Recent forecasts suggest a challenging outlook for the Saudi Riyal (SAR) against the Pakistani Rupee (PKR), primarily driven by external economic pressures and domestic developments in Pakistan. Currently, the SAR to PKR exchange rate is near 74.83, hovering close to 90-day lows and only marginally below its 3-month average of 75.34. Analysts note that the exchange rate has remained relatively stable within a tight range of 1.6%, fluctuating between 74.83 and 76.06.
The SAR's strength is bolstered by its peg to the U.S. dollar, providing a level of currency stability. Experts believe that this fixed exchange rate regime, while protective, does not directly insulate the Riyal from broader regional economic dynamics or geopolitical tensions that may affect investor sentiment.
On the other hand, the PKR is currently facing substantial challenges. Heightened geopolitical tensions have led to a 12% depreciation of the PKR against the U.S. dollar this year, with forecasts predicting further declines as the exchange rate may reach 100 PKR/USD by the end of 2025. Factors such as reduced remittances, an adverse trade balance, and investor concerns contribute to this gloomy outlook.
However, there are pockets of resilience for the PKR. Record remittances of $38.3 billion in the fiscal year 2024–25, representing a 26.6% increase, have helped bolster Pakistan's foreign exchange reserves. This influx has provided some support to the PKR, which, combined with positive market sentiment stemming from an agreement with the International Monetary Fund (IMF), has led to minor appreciations.
Furthermore, the State Bank of Pakistan's interventions—such as purchasing $9 billion from the interbank market to stabilize the currency—have injected temporary relief into the market. Nonetheless, experts caution that these measures may not be sustainable in the long term if underlying economic fundamentals remain unfavorable.
In conclusion, while the SAR is expected to maintain a relatively stable position due to its pegged nature, the PKR's performance is likely to be influenced heavily by geopolitical developments and economic policies. Businesses and individuals engaging in international transactions should keep a close watch on these evolving factors to make informed currency exchange decisions.
