The USD to PKR exchange rate is currently range-bound. The recent appreciation of the US dollar is largely attributed to a decline in unemployment, which has prompted investor interest despite a slowdown in job creation. The outlook for interest rates will also be influenced by the Federal Reserve’s anticipated rate cuts next year, which may exert downward pressure on the USD.
For the Pakistani rupee, there are signs of stabilization this early in 2026, aided by narrowing spreads in the interbank and open market rates. However, analysts forecast a gradual depreciation of the PKR due to ongoing inflation and economic reforms, despite an optimistic perspective surrounding privatization efforts.
In the near-term, the exchange rate is expected to remain within a stable range, fluctuating slightly around current levels. Upside risks could arise from improved geopolitical stability, while downside risks may stem from unexpected increases in US interest rates or more severe inflation in Pakistan.
