On March 31, 2026, the Pakistani rupee showed signs of strengthening during Tuesday’s trading session. The State Bank of Pakistan (SBP) set the USD/PKR mark-to-market rate at Rs 279.1533, a marginal decline of 1 paisa from the previous close, marking the narrowest rate recorded in 2026 so far.
The US dollar remained anchored near the 279.15 level, comfortably trading within the 279–282 range that has prevailed since October. One-week forward contracts were priced at 279.60, reflecting a minimal carrying cost of 0.16%. Exporters continued to sell positions above 279.60, while petroleum importers took advantage of dips below 279.10 to accumulate. Market liquidity remained ample, with currency movements driven more by technical factors than fundamental changes.
The British pound experienced a notable decline, dropping to 368.75 from 369.64 the previous day. The one-year forward rate stood at 381.02, indicating an annualized depreciation of 3.3% against the rupee. Textile exporters shipping to Manchester actively hedged six-month receivables near the 370 mark, maintaining robust forward premiums.
The Saudi riyal inched higher to 74.3972, with a 12-month forward rate of 76.74, translating into an annualized 3.1% depreciation—the narrowest spread among key remittance currencies. Exchange houses reported steady customer activity as pilgrims secured rates ahead of the upcoming Umrah season.
The UAE dirham firmed slightly to 76.0087, with six-month forwards at 77.31, implying a 3.4% annualized rupee softness. Gulf salary remittances continued to flow through official banking channels, stabilizing the cross-rate.
The Qatari riyal mirrored its Gulf counterparts, trading at 76.5853 with a 12-month forward of 79.30, reflecting a 4.2% annualized difference. This closely aligns with the Saudi riyal and UAE dirham, underscoring the uniform stability of Gulf currency pegs.
The Kuwaiti dinar softened to 909.4224 amid subdued USD cross rates. Twelve-month forwards were at 937.59, equating to a 3.1% annualized rupee depreciation, slightly wider than other Gulf currencies due to the dinar’s thinner market liquidity.
The Australian dollar strengthened to 191.40 as iron ore prices stabilized above $98 per ton. The one-year forward rate was 198.15, indicating a 3.5% annualized rupee depreciation, closely tracking the Saudi riyal curve and reflecting commodity-linked volatility.
The Canadian dollar retreated to 200.23 amid WTI crude oil prices near $71 per barrel. Twelve-month forwards at 210.83 implied a 5.3% annualized rupee softness. However, prairie pulse importers reportedly pre-booked April shipments, limiting further downside for the Canadian dollar.
Other major currencies opened with slight adjustments: the euro at 320.13, down 0.2% for the week following softer Eurozone inflation data, with a one-year forward at 336.79 indicating 5.2% annualized rupee weakness. The Japanese yen remained the most affordable major currency at 1.75 per unit, but forwards priced a 6.4% annualized rupee decline—the steepest among G-10 currencies. The Swiss franc traded at 348.99; Singapore dollar at 216.34; Swedish krona at 29.24; Norwegian krone at 28.49; Danish krone at 42.86; New Zealand dollar at 159.41; Chinese yuan at 40.41; Turkish lira at 6.27; Russian ruble at 3.44; Indian rupee at 2.97; and Bangladeshi taka at 2.28—all within familiar ranges and showing no event-risk premium ahead of the IMF’s first-quarter 2026 review.
In a significant development, the compressed forward premiums—generally around 4–5% annualized even for less liquid currency pairs—signal confidence among importers and exporters that the State Bank of Pakistan has adequate resources to support the rupee during the winter remittance period. Foreign exchange reserves have risen to $21.26 billion, while the real effective exchange rate (REER) eased to 98.2 in November, a level the IMF considers “competitive yet not undervalued.”
Unless oil prices surge above $90 per barrel or political instability disrupts the IMF program, market participants expect the USD/PKR rate to remain within the 278–282 range throughout the first quarter of 2026, influencing the broader currency market accordingly.
