Dubai/Karachi – April 28, 2025 – The UAE Dirham (AED) has maintained its exchange rate at 76.49 PKR against the Pakistani Rupee (PKR). This confirms UAE’s enduring economic strength alongside the country’s strategic fiscal policies.
The exchange rate clearly suggests that financial uncertainty is reduced for many Pakistani workers living in the UAE. The remittances these workers send home to their families help bolster the country’s economy because the exchange rate is consistent over a period of time. Stability in the exchange rate also aids trade between the two countries which helps businesses plan and execute trade in Pakistan and UAE.
Currency Valuation: A Tale of Two Systems
The exchange rate between the AED and PKR is determined in the foreign exchange market, where currencies are bought and sold.
- UAE Dirham (AED): The AED is pegged to the US Dollar at a fixed rate of approximately 3.67 AED to 1 USD. This peg provides a strong anchor, linking the Dirham’s value to the world’s reserve currency. The US Dollar’s global performance therefore directly influences the Dirham’s value, contributing to its stability.
- Pakistani Rupee (PKR): The PKR operates under a managed floating exchange rate system. Its value is influenced by market forces, but the State Bank of Pakistan (SBP) intervenes periodically to manage fluctuations. This system means the Rupee’s value can be more volatile, influenced by factors such as Pakistan’s inflation rate, trade balance, foreign reserves, and political and economic developments.
UAE’s Prudent Policies Underpin Stability
The UAE’s economic stability is a direct result of its government’s proactive and diversified economic policies. Key initiatives include:
- Economic Diversification: The UAE has successfully diversified its economy away from a heavy reliance on oil, with sectors like tourism, finance, real estate, and logistics playing increasingly important roles.
- Investment-Friendly Environment: The UAE has created an attractive environment for foreign investment through measures such as free zones, tax incentives, and streamlined business regulations.
- Monetary Discipline: The Central Bank of the UAE’s commitment to the US Dollar peg, combined with prudent fiscal policies and substantial foreign reserves, reinforces confidence in the Dirham.
These policies have enabled the UAE to build a resilient economy capable of withstanding global economic shocks, contributing directly to the Dirham’s stability.
Currency Overview
- Pakistani Rupee (PKR): The official currency of Pakistan, issued by the State Bank of Pakistan.
- UAE Dirham (AED): The official currency of the United Arab Emirates, issued by the Central Bank of the UAE, pegged to the US Dollar.
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