Pakistan Rupee Posts Year of Unbroken Strength in FY26, Creating Winners and Losers Across PSX Sectors

FY26: The Rupee Holds Firm

The Pakistani rupee (PKR) posted a year of sustained stability and appreciation against the US dollar in FY26, reversing the sharp devaluations of FY23 and FY24 that had created severe balance-sheet volatility across import-heavy and export-oriented sectors alike. The stabilisation was underpinned by a combination of record remittance inflows, IMF programme discipline on fiscal and monetary policy, and SBP reserve accumulation. By the close of FY26, PKR had appreciated meaningfully in real effective terms relative to its crisis lows.

Impact on Textile Exporters

For Pakistan's listed textile exporters, a strong PKR is a double-edged reality. Companies like NML (Nishat Mills), KTML (Kohinoor Textile), and GATM earn revenues primarily in US dollars through fabric, yarn, and garment exports. When those USD revenues are converted to PKR for financial reporting and dividends, a stronger PKR means each dollar of export revenue is worth fewer rupees. This compresses reported earnings in PKR terms even if export volumes and USD prices remain stable. The FY26 PKR strength, sustained across the full year, would have created a persistent headwind on the PKR earnings of the textile sector.

Impact on Refineries

For import-dependent industries, a strong PKR has the opposite effect. Oil refineries -- including ATRL (Attock Refinery) and NRL (National Refinery) -- purchase crude oil priced in US dollars on international markets. When the PKR is stronger, each dollar of crude costs fewer rupees to acquire. Lower PKR-denominated crude import costs, holding refining margins in USD terms constant, translate directly to improved profitability in PKR terms. The FY26 period of sustained PKR strength was therefore supportive of refinery margins, partially offsetting any softening in global product crack spreads.