Pakistan Rupee seen stable at PKR278 through 2026

Fitch Solutions' BMI projects the rupee at about Rs278 to the dollar for the whole of 2026, according to an economic outlook reported by Mettis Global. This replaces an earlier BMI forecast of Rs288 by the end of 2026. The revised view rests on higher interest rates, stronger reserves and better access to international capital markets.

Foreign exchange reserves reached $17.1 billion on August 28, roughly 2.6 months of imports, helped by remittances and continued support from bilateral partners and the IMF. In April, the State Bank pushed its benchmark rate up 100 basis points, landing at 11.5%. BMI expects it to stay there. Price pressures are likely to keep inflation outside the central bank's 5%-7% target range for the rest of fiscal 2026/27.

BMI now sees the rupee weakening to around Rs292 per dollar by end-2027 as export competitiveness erodes under an overvalued real exchange rate. The merchandise trade gap expanded 34.6% in fiscal 2025/26, reaching $39.6 billion against $29.4 billion the previous year. BMI flagged a tilt toward faster devaluation if the US-Iran conflict worsens or lasts longer, with oil now near $100 a barrel adding pressure.