Dubai, June 24, 2025 – The UAE Dirham (AED) continued its upward trajectory against the Pakistani Rupee (PKR), reaching 77.24 PKR today, up from yesterday’s 77.21 PKR.
This marks a notable monthly increase, with the AED climbing from 76.44 PKR at the start of June, reflecting a 1.05% appreciation over the period.
Valuation Dynamics
The AED’s rise is primarily driven by the UAE’s robust economic fundamentals. Pegged to the US Dollar at a fixed rate of 3.6725 AED per USD since 1997, the Dirham benefits from the Dollar’s global strength. The US Dollar has remained resilient amid high interest rates set by the Federal Reserve to curb inflation, bolstering currencies like the AED. Additionally, the UAE’s thriving oil exports, tourism sector, and foreign investment inflows have supported the Dirham’s stability.
In contrast, the Pakistani Rupee faces persistent pressure due to Pakistan’s economic challenges. High inflation, a widening trade deficit, and reliance on foreign loans have weakened the PKR. Despite efforts by the State Bank of Pakistan to stabilize the currency through interventions and policy tightening, the Rupee has struggled against stronger currencies like the AED. The AED’s month-long climb from 76.44 PKR to 77.24 PKR underscores these divergent economic trajectories.
Impact
The AED’s appreciation has mixed implications. For Pakistani expatriates in the UAE—over 1.7 million strong—the stronger Dirham boosts the value of remittances sent home. A single AED now fetches more PKR, enhancing purchasing power for families in Pakistan. In 2024, remittances from the UAE to Pakistan totaled approximately $5.6 billion, and this currency shift could further increase their real value.
However, Pakistani importers dealing with UAE-based suppliers face higher costs, as goods priced in AED are now more expensive in PKR terms. This could strain Pakistan’s trade balance, particularly for petroleum products and machinery imported from the UAE. Conversely, UAE businesses exporting to Pakistan may see improved profit margins due to favorable exchange rates.
For travelers, the stronger AED makes the UAE a costlier destination for Pakistanis, potentially dampening tourism flows. Meanwhile, Emiratis visiting Pakistan benefit from greater purchasing power.
Currency Overview
The UAE Dirham (AED), introduced in 1973, is the official currency of the United Arab Emirates. Pegged to the US Dollar, it is abbreviated with “د.إ” or “AED” and subdivided into 100 fils. Its stability makes it a trusted currency in global trade and finance.
The Pakistani Rupee (PKR), established in 1948, is Pakistan’s official currency, abbreviated with “₨” or “PKR” and divided into 100 paisa. Managed by the State Bank of Pakistan, the PKR operates under a managed float regime, with its value influenced by market forces and occasional central bank interventions.
As the AED continues its steady rise, market watchers anticipate further shifts depending on global oil prices, US monetary policy, and Pakistan’s economic reforms.
