Pakistan’s economic outlook has received a boost as BMI, a subsidiary of global research firm Fitch, withdraws its earlier forecast of rupee depreciation in 2026.
BMI previously expected the Pakistani rupee to weaken against the US dollar and reach around Rs288 by the end of 2026. However, the research firm has now revised its projection.
According to its latest assessment, the rupee could remain relatively stable at around Rs278 per US dollar throughout 2026.
Higher Interest Rates Support Rupee
BMI expects Pakistan’s elevated interest rates to provide support for the local currency.
Higher rates can help strengthen demand for the rupee and reduce pressure on the exchange rate. Therefore, BMI now sees a more stable currency outlook for the country.
The revised forecast also reflects improvements in Pakistan’s external financial position.
Foreign Exchange Reserves Improve
Pakistan’s foreign exchange reserves reached $17.1 billion by the end of August, showing a notable improvement in the country’s external liquidity.
Furthermore, Pakistan raised $3 billion through a Eurobond issued on September 3.
BMI believes stronger access to international financial markets could help Pakistan increase its foreign exchange reserves further.
The improved market access also gives the country greater flexibility in managing external financing requirements.
Rupee Faces Lower Depreciation Pressure
The latest BMI forecast signals a significant shift from its earlier expectations for Pakistan’s currency. Previously, the research firm had projected a weaker rupee and a dollar rate of Rs288 by the end of 2026. Now, it expects the exchange rate to remain closer to Rs278.
Moreover, stronger reserves and improved access to international capital markets could provide additional support.
The revised outlook suggests that Pakistan’s rupee may face less depreciation pressure during 2026.
However, global financial conditions, interest rates and Pakistan’s external financing needs will continue to influence the currency’s performance.
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