The USD to PKR exchange rate has been subject to various influencing factors over the past two months, reflecting a complex interplay of economic conditions, geopolitical tensions, and domestic policy measures in both the United States and Pakistan.
Recently, the US dollar has exhibited fluctuations influenced by a risk-positive market environment. Analysts noted the USD experienced a slight slip as market sentiment shifted towards higher risk assets, reducing demand for the dollar as a safe haven. Notably, a drop in initial jobless claims provided temporary support to the USD, but the broader risk-on atmosphere limited its recovery potential. With no significant American economic data on the calendar, market risk appetite is likely to dictate the USD's performance in the short term.
On the other hand, recent developments affecting the PKR are more concerning. The Pakistani rupee, having depreciated significantly since January 2025—about 12% against the USD—is projected to continue its downward trend, potentially reaching 100 PKR per USD by year-end. Factors such as reduced remittances and persistent trade deficits are exerting pressure on the PKR. However, a surge in remittances, amounting to $38.3 billion in the fiscal year 2024–25 and an agreement with the IMF have provided some positive sentiment, leading to slight PKR appreciation.
The State Bank of Pakistan's interventions, including purchasing USD to create artificial demand for the PKR, have also influenced its valuation, despite contradicting market fundamentals. Current exchange data indicates that the USD to PKR rate at 281.8 is just below its three-month average and has traded within a stable range of 1.3%, underscoring relative stability amidst the challenging circumstances.
In summary, the outlook for USD to PKR exchange rates appears mixed. Economic and geopolitical uncertainties loom, particularly for the PKR, while the USD remains vulnerable to shifts in market sentiment. Analysts will continue to closely monitor these dynamics, as developments will ultimately shape the trajectories of both currencies in the coming months.
