Karachi/Dubai- June 5, 2025: The most recent information from the currency market reveals that the exchange rate for the UAE Dirham (AED) is currently at 76.44 PKR against the Pakistani Rupee (PKR).
This stable rate follows a period of consistency in the exchange values of AED and PKR, supported by steady remittances and positive economic conditions in both the UAE and Pakistan.
Understanding the AED-PKR Exchange Rate
The exchange rate between the UAE Dirham and the Pakistani Rupee is influenced by market forces and decisions made by central banks. Since 1997, the Dirham has been pegged to the US Dollar at approximately 3.67 AED/USD, as a result of the UAE Central Bank’s policy. This fixed exchange rate helps to preserve the Dirham’s value in relation to the US Dollar, which is backed by the UAE’s oil-dependent economy and ongoing diversification efforts.
On the other hand, the value of the PKR is determined by a floating exchange rate system. Our analysis indicates that it is primarily influenced by the supply and demand dynamics of foreign currencies. The State Bank of Pakistan steps in occasionally to mitigate volatility. Several factors, including remittances, foreign reserve levels, the trade balance, and inflation—further highlighted by the noteworthy $3.1 billion sent from the UAE in February 2025—play vital roles in shaping the PKR’s value.
The daily conversion rates for AED to PKR are established through interbank and open market transactions. The current buying rate is set at 76.67 PKR, whereas banks and exchange companies have a selling rate of around 77.25 PKR, which may include a minor additional fee for sellers. This information is refreshed every day at 8:00 AM Pakistan Standard Time and may fluctuate throughout the day due to market conditions.
Significance of Stability
The fixed exchange rate of 76.44 PKR for the UAE Dirham significantly impacts Pakistan and the more than two million Pakistani expatriates residing in the UAE. This stable rate fosters confidence among them when sending remittances back to support their families in Pakistan. Furthermore, it benefits trading companies engaged in the import and export of goods such as food, clothing, and construction materials between Pakistan and the UAE, thus minimizing the risks associated with currency fluctuations.
For Pakistan’s economy, a steady AED-PKR exchange rate enables effective remittance flows, which are crucial for bolstering foreign exchange reserves. Analysts suggest that this stability results from sound trading practices, strong reserves, and an absence of speculative pressures. The UAE is a key economic partner for Pakistan, with remittances playing a role in stabilizing the PKR. However, the managed floating nature of the PKR makes it vulnerable to domestic factors such as inflation and trade deficits. Currency analysts caution that despite the current stability of the AED-PKR exchange rate, market participants should remain alert for potential volatility arising from external elements like shifts in oil prices and geopolitical tensions that could affect the value of the US Dollar and, subsequently, the Dirham.
Overview of AED and PKR
The UAE Dirham was introduced in 1973 as the official currency of the UAE, replacing the Qatar and Dubai Riyal. It is issued and managed by the UAE Central Bank and is subdivided into 100 fils. The currency is abbreviated as AED, and its peg to the US Dollar is maintained through the UAE’s oil riches, prudent financial governance, and its prominence as a global trade hub. The Dirham is used throughout all seven emirates, especially in major cities like Dubai and Abu Dhabi, as well as popular tourist destinations.
The Pakistani Rupee, which began circulation in 1947, serves as Pakistan’s official currency. It is regulated by the State Bank of Pakistan.
