SGD/PKR Outlook: The outlook for SGD/PKR is likely to increase, as the rate is currently above its recent average and near recent highs, supported by Singapore's accommodative monetary policy.
Key drivers:
• Rate gap: The Monetary Authority of Singapore is adopting a more accommodative stance, while the State Bank of Pakistan is indicating potential gradual depreciation, widening the rate gap in favor of the SGD.
• Risk/commodities: Oil prices have remained stable, impacting the PKR, which relies on oil imports, while stability supports the SGD.
• One macro factor: The Singapore economy is maintaining growth despite global trade tensions, contributing to a positive outlook for the SGD.
Range: SGD/PKR is expected to hold steady within the recent three-month range, with slight upward pressure.
What could change it:
• Upside risk: A stronger-than-expected economic report from Singapore could boost the SGD further.
• Downside risk: Renewed political or economic instability in Pakistan could put further downward pressure on the PKR.
