Karachi witnessed a subtle strengthening of the Pakistani rupee during Thursday’s trading session, as the State Bank of Pakistan (SBP) set the USD/PKR mark-to-market rate at Rs 279.4115. This figure represents a marginal improvement of one paisa compared to the previous day’s close, marking the narrowest exchange rate fluctuation recorded so far in 2026. The rupee’s stability within this tight band highlights the cautious but steady sentiment prevailing in the foreign exchange market.
The US dollar, which remains the dominant currency in Pakistan’s forex dealings, held firm around the 279.41 level. This rate comfortably stays within the familiar trading corridor of 279 to 282 that has been observed since October last year. Forward contracts for one week are priced at 279.79, indicating a minimal carrying cost of just 0.14 percent. Market participants, particularly exporters, continue to offload their dollar holdings when rates exceed 279.80, while petroleum importers tend to accumulate dollars when the price dips below 279.40. This dynamic creates a natural equilibrium, preventing any sharp swings in the exchange rate. A senior treasury official explained that the current currency movements are largely driven by technical factors and market liquidity, rather than any significant economic or political developments.
Turning to other major currencies, the British pound experienced a slight decline, slipping to 372.40 from the previous day’s 373.11. The one-year forward rate for the pound stands at 386.46, which translates into an annualized depreciation of approximately 3.8 percent against the rupee. This trend has prompted textile exporters dealing with Manchester to hedge their six-month receivables around the 374 mark, maintaining a comfortable forward premium that helps mitigate currency risk in their international transactions.
Among the Gulf currencies, the Saudi Riyal inched upward to 74.4244, with its 12-month forward rate at 76.76, reflecting an annualized rupee depreciation of 3.1 percent. This remains the narrowest spread among the key remittance currencies, underscoring the Riyal’s relative stability. Exchange houses have reported consistent foot traffic from Pakistani pilgrims preparing for the upcoming Umrah season, as they seek to secure favorable exchange rates ahead of their travel. Similarly, the UAE Dirham firmed slightly to 76.0811, with a six-month forward rate of 77.36, implying a 3.3 percent annualized weakening of the rupee. Official banking channels continue to facilitate steady remittance flows from Gulf-based workers, which helps anchor the Dirham’s exchange rate.
The Qatari Riyal mirrored its Gulf counterparts, trading at 76.6036 with a 12-month forward rate of 79.55. This corresponds to an annualized rupee depreciation of 4.2 percent, closely aligning with the Saudi Riyal and UAE Dirham, and highlighting the consistent peg stability across Gulf currencies. Meanwhile, the Kuwaiti Dinar softened slightly to 912.5130, influenced by subdued movements in the US dollar cross rates. Its 12-month forward rate is 949.36, indicating a 4.0 percent annualized depreciation of the rupee, which is marginally wider than other Gulf currencies due to the relatively thinner market liquidity for the dinar.
Commodity-linked currencies also showed modest gains. The Australian dollar strengthened to 196.34, buoyed by iron ore prices holding steady above $104 per tonne. Its one-year forward rate is 202.33, implying an annualized rupee depreciation of 3.1 percent, closely tracking the Saudi Riyal’s trend and reflecting the volatility associated with commodity markets. The Canadian dollar rose to 204.63, supported by WTI crude oil prices near $76 per barrel. However, its 12-month forward rate at 215.31 suggests a higher annualized rupee depreciation of 5.2 percent. Importers of Canadian prairie pulses have reportedly pre-booked shipments for March, which has limited further upward pressure on the Canadian dollar.
Other significant currencies maintained familiar ranges, with the Euro opening at 323.99, down slightly by 0.1 percent over the week following softer inflation data from the Eurozone. The Euro’s one-year forward rate stands at 341.53, translating into a 5.4 percent annualized rupee depreciation. The Japanese yen remains the most affordable major currency at 1.78 per unit, yet its forward contracts price in a 6.1 percent annualized decline against the rupee, marking the steepest depreciation among G-10 currencies. Additional currencies such as the Swiss franc (357.38), Singapore dollar (218.61), Swedish krona (30.27), Norwegian krone (28.87), Danish krone (43.36), New Zealand dollar (165.31), Chinese yuan (40.51), Turkish lira (6.35), Russian ruble (3.58), Indian rupee (3.05), and Bangladeshi taka (2.28) all remained within their expected trading bands. This stability suggests that the market is not pricing in any immediate event-related risks ahead of the International Monetary Fund’s first-quarter 2026 assessment.
