Karachi/Manama- May 19, 2025: The Bahraini Dinar (BHD) remained steady against the Pakistani Rupee (PKR) today, with the exchange rate stabilized at 747.07 PKR, according to the latest interbank market data.
This stability stems from the overall economic factors impacting both currencies, particularly Bahrain’s fixed exchange rate policy and Pakistan’s ongoing efforts towards economic stability.
Valuation Process
The exchange rate for the Bahraini Dinar and Pakistani Rupee is primarily determined in the interbank market, where large financial institutions engage in currency trading. The U.S. dollar (USD) peg significantly influences the BHD’s valuation. The fixed exchange rate of 1 USD = 0.376 BHD, established by the Central Bank of Bahrain since 2001, contributes to maintaining the BHD’s stability against major currencies, including those indirectly pegged to the USD, like the PKR.
In contrast, the PKR operates under a managed float system, where the State Bank of Pakistan intervenes to control excessive currency fluctuations. The BHD/PKR exchange rate is calculated using the USD/PKR rate along with the fixed peg of BHD/USD. For instance, if 1 USD is approximately 280 PKR, the BHD value in PKR is derived by dividing the PKR/USD rate by the BHD/USD rate (280 ÷ 0.376 ≈ 747.07 PKR). Currency converters and financial platforms such as Wise and Coinbase confirm this rate in real-time as of May 17, 2025.
Economic Impact
The steadiness of the Bahraini Dinar against the PKR has significant implications for trade, remittances, and tourism between Bahrain and Pakistan. With a substantial Pakistani expatriate community in Bahrain, a stable exchange rate guarantees consistent remittance flows, benefiting families in Pakistan who rely on these funds. For businesses, a stable rate simplifies trade, particularly in sectors like construction and retail, where interaction between Pakistani labor and Bahraini companies is common.
For Pakistan, having a stable PKR against the BHD would support its overall attempts at broader economic stabilization in light of concerns such as inflation and foreign debt. However, the PKR’s value remains susceptible to domestic factors, including political stability and foreign exchange reserves, which could impact future fluctuations. Bahrain’s economy, supported by its USD peg and ongoing fiscal reforms aimed at reducing oil dependency, is expected to maintain the strength of the BHD, ensuring continued stability in the BHD/PKR pairing.
Both tourists and investors benefit from this predictability. Pakistani visitors to Bahrain can plan their budgets more effectively, while Bahraini investors exploring opportunities in Pakistan’s growing markets face reduced currency risk. Nevertheless, analysts caution that global economic changes, such as adjustments in U.S. monetary policies or oil prices, may indirectly affect the PKR’s value, given Pakistan’s reliance on imports.
Currency Background
Since 1965, the Bahraini Dinar (BHD) has served as Bahrain’s official currency, divided into 1,000 fils. Pegged to the USD, it ranks among the world’s highest-valued currencies, denoted by BHD. The BHD is issued by the Central Bank of Bahrain and is used solely within the kingdom, not being widely accepted for international transactions, necessitating exchanges for overseas travel.
The Pakistani Rupee, symbolized as ₨ or Rs, has been the national currency of Pakistan since the country gained independence in 1947. Regulated by the State Bank of Pakistan, it is subdivided into 100 paisa, although paisa coins are no longer in circulation. The PKR is commonly used throughout the entire country, from major urban centers like Karachi to rural regions, but similar to the BHD, it is not universally accepted abroad, requiring conversion for international use.
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