Recent analyses indicate that the USD to PKR exchange rate is influenced by a confluence of factors affecting both currencies. The US dollar is currently facing downward pressure due to shifting Federal Reserve interest rate expectations, with a significant possibility of a rate cut in December now pegged at 75%. Optimism surrounding a peace deal in Ukraine adds to the greenback's challenges. Market observers are keenly awaiting the upcoming US retail sales figures for September, which could further diminish demand for the dollar if they indicate a slowdown.
On the other hand, the Pakistani rupee has recently suffered a 12% depreciation against the USD since the beginning of 2025, attributed mainly to escalating geopolitical tensions, reduced remittances, and ongoing trade deficits. Current forecasts suggest the PKR may decline further, potentially reaching 100 PKR/USD by year-end. However, record remittances in the fiscal year 2024–25, which have increased by 26.6% to $38.3 billion, have somewhat bolstered foreign exchange reserves, lending temporary support to the PKR.
Market sentiment toward the PKR has found some momentum from a recent staff-level agreement between Pakistan and the International Monetary Fund (IMF), which has led to a slight appreciation of the rupee. Furthermore, the State Bank of Pakistan's interventions in the foreign exchange market have aimed to stabilize the currency, involving substantial purchases to create artificial demand.
As of now, the USD to PKR rate stands at 281.4, situated just below its three-month average. It has traded within a relatively stable 1.2% range, oscillating between 280.7 and 284.1. Analysts underscore the delicate balance of these economic and geopolitical dynamics, urging businesses and individuals engaged in currency transactions to remain vigilant and informed as the situation evolves.
