As of February 4, 2025, the exchange rate between the US Dollar (USD) and the Pakistani Rupee (PKR) stands at approximately PKR 279.4 per USD
Recent Trends
In recent months, the USD/PKR exchange rate has exhibited relative stability. For instance, on October 27, 2024, the rate was recorded at PKR 277.65 per USD in the open market, with a selling rate of PKR 279.35.
Factors Influencing the Exchange Rate
Several factors contribute to the fluctuations in the USD/PKR exchange rate:
- Inflation Rates: Higher inflation in Pakistan can erode the value of the PKR, leading to a higher exchange rate.
- Interest Rates: Differences in interest rates between the US and Pakistan can influence investor decisions, affecting the demand for both currencies.
- Political Stability: Political events and stability in Pakistan play a crucial role in investor confidence, impacting the PKR’s value.
- Trade Balance: A deficit in Pakistan’s trade balance can increase demand for foreign currencies like the USD, affecting the exchange rate.
Future Projections
Looking ahead, forecasts suggest a modest appreciation of the USD against the PKR. Projections for 2025 indicate that the exchange rate could range between PKR 278.20 and PKR 288.91 per USD, with an average annualized rate of PKR 280.18. This represents a potential return on investment of approximately 3.72% compared to current rates.
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Implications for Stakeholders
- Importers: A higher USD/PKR rate increases the cost of imported goods, potentially leading to higher prices for consumers.
- Exporters: A weaker PKR can make Pakistani goods more competitive abroad, benefiting exporters.
- Investors: Currency fluctuations can impact returns on investments denominated in foreign currencies.
Conclusion
The USD/PKR exchange rate is influenced by a complex interplay of economic indicators, policy decisions, and global events. Stakeholders are advised to monitor these factors closely and consider hedging strategies to mitigate potential risks associated with currency volatility.