Dubai/Karachi, June 11, 2025 – The UAE Dirham (AED) has remained constant in relation to the Pakistani Rupee (PKR), standing at 76.83 PKR in the open market, a small increase from last week’s 76.44 PKR, based on recent foreign exchange statistics. This stability reflects the UAE’s strong economic measures and presents serious implications for trade and remittances between the two countries.
Valuation Process of AED Against PKR
The exchange rate between the UAE Dirham and Pakistani Rupee is determined in the foreign exchange market, influenced by supply and demand dynamics. The AED, pegged to the US Dollar at a fixed rate of 3.67 AED to 1 USD, benefits from the UAE’s stable, oil-driven economy and diversified investments. This peg ensures the Dirham’s value remains closely aligned with the Dollar, providing global market confidence. In contrast, the PKR operates under a managed float system, where its value is shaped by market forces and periodic interventions by the State Bank of Pakistan. Factors such as Pakistan’s trade deficits, inflation, and foreign exchange reserves contribute to PKR volatility, while the UAE’s trade surplus and geopolitical stability bolster the Dirham. Recent data shows the AED/PKR rate fluctuating within a narrow range, with a 30-day high of 77.0644 and a low of 76.7456, reflecting relative stability.
Impact on Trade and Remittances
The steady AED-PKR exchange rate has significant implications, particularly for the millions of Pakistani expatriates in the UAE. With each Dirham translating into more PKR, remittances—amounting to $3.1 billion from the UAE in February 2025 alone—provide crucial support to Pakistan’s economy, helping stabilize foreign reserves and reduce trade deficits. For Pakistani businesses importing goods from the UAE, the stable rate ensures predictable costs, fostering confidence in trade. However, the stronger Dirham can increase the cost of UAE exports for Pakistani consumers, highlighting the delicate balance of currency dynamics.
UAE’s Economic Policies Driving Stability
The UAE’s economic strength is a key driver of the Dirham’s stability. The country’s consistent trade surplus, primarily from oil exports, attracts foreign investment and supports currency value. High interest rates draw capital inflows, while political stability and prudent fiscal policies enhance investor confidence. The UAE’s diversification into tourism, technology, and renewable energy further strengthens its economy, reducing reliance on oil and reinforcing the Dirham’s global standing. These strategic policies contrast with Pakistan’s economic challenges, including political uncertainties and inflation, which exert downward pressure on the PKR.
Introduction to AED and PKR
The UAE Dirham (AED), introduced in 1973, is the official currency of the United Arab Emirates, subdivided into 100 fils and symbolized as د.إ or Dhs. Issued by the Central Bank of the UAE, it replaced the Qatar and Dubai Riyal and is widely regarded as a stable currency due to its peg to the US Dollar and the UAE’s strong economic fundamentals. The Pakistani Rupee (PKR), in circulation since 1947, is the official currency of Pakistan, managed by the State Bank of Pakistan. Operating under a managed float, the PKR is more susceptible to domestic and global economic pressures, leading to greater volatility compared to the AED.
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