The USD to PKR exchange rate is currently witnessing fluctuations influenced by a range of economic and geopolitical factors. Recently, the US dollar has shown signs of decline, attributed to growing expectations of a Federal Reserve rate cut amid weakening labor market indicators. Analysts noted that private employers have reduced jobs, suggesting a less robust labor market, which has fueled speculation about a dovish stance from the Fed in upcoming speeches.
Recent developments impacting the US dollar also include a potential leadership transition at the Federal Reserve and upcoming inflation data that could sway interest rate decisions. Furthermore, the evolving US-China trade tensions and global dedollarization efforts may add further pressure on the USD. The Mar-a-Lago Accord, aimed at realigning international economic relations while devaluing the dollar, also suggests fundamental shifts in sentiment around the USD's strength.
On the other hand, the Pakistani rupee faces challenges from escalating geopolitical tensions, leading to a significant depreciation against the dollar—down 12% since January 2025. However, record remittances have bolstered Pakistan's foreign exchange reserves, providing some support for the PKR. Experts observe that remittances have surged to $38.3 billion, significantly impacting market sentiment positively, especially following an agreement with the International Monetary Fund (IMF).
Despite attempts by the State Bank of Pakistan to stabilize the rupee through interventions in the interbank market, the currency has been under pressure. Analysts highlight the complexities of Pakistan's economic environment, suggesting a potential further decline to around 100 PKR per USD by the end of the year, impacted by persistent trade deficits and investor flight.
Currently, the USD to PKR rate sits at approximately 282.8, nearing its three-month average and reflecting a stable trading range of 1.2% between 280.6 to 284.1. Analysts continue to monitor these developments closely, indicating that both domestic and international factors will play crucial roles in shaping the trajectory of the exchange rate in the near term.
