Rupee likely to stand at 291 per USD by end-FY26

LAHORE: The exchange rate should ideally stabilise around Rs 272/USD in Financial Year 2026 (FY26) if the current account deficit (“CAD”) stands at 0.4% of GDP (which is targeted value by the govt), said market sources. If incorporated valuation for FY25 as well, get added, it should not exceed Rs 282/USD.

By the end of the FY26, the Rs/USD exchange rate is expected to stand at 291 or above, reflecting a difference of (291-268=23 rupees).

This difference corresponds to an approximate 4.6% increase in inflation for FY26. If the current exchange rate is adjusted by 23 rupees, inflation is expected to decrease, which may also lead to a reduction in the interest rate.

They said a 1% reduction in the interest rate will result in a decrease of Rs 515 billion in domestic debt interest repayments. Consequently, a 4.6% reduction will lead to a decline in debt interest servicing by approximately Rs 2,369 billion. Such fiscal space can be recruited in to the Agriculture sector, IT services and growth driving sector which is Manufacturing.