ISLAMABAD: Chairman of the Exchange Companies Association of Pakistan(ECAP) Malik Bostan has forecasted a significant appreciation of thePakistani Rupee against the US Dollar, potentially dropping below Rs250,driven primarily by burgeoning international demand for the JF-17 Thunderfighter jet. In a recent television appearance, Bostan highlighted that upto 15 countries have expressed interest in importing the jointly developedPakistan-China aircraft, creating substantial foreign exchange inflowsthrough defence exports. This development comes amid a robust economicrecovery, where the Rupee has already strengthened by approximately Rs30from its peak of Rs340 per dollar. The optimism stems from multipleconverging factors, including record defence deals and a surging stockmarket, positioning Pakistan for sustained financial stability.
The surge in global interest for the JF-17 Thunder has transformedPakistan’s defence sector into a key economic driver. Recent reportsindicate active negotiations and confirmed deals with several nations,including major contracts worth billions of dollars. For instance,Azerbaijan secured 40 Block III variants in a landmark agreement valued ataround $4.6 billion, while Libya finalised a $4 billion package includingJF-17 jets. Other countries such as Sudan are nearing $1.5 billion dealsencompassing jets and additional military equipment. This momentum haselevated the JF-17’s status as a cost-effective 4.5-generation fighter,priced between $25-30 million per unit, appealing to air forces seekingaffordable yet capable platforms.
Beyond confirmed sales, ongoing talks with nations like Bangladesh,Indonesia, Saudi Arabia, and Iraq underscore the aircraft’s growing appeal.Bangladesh has held high-level discussions for potential procurement ofJF-17s alongside training aircraft, while Indonesia explored acquiring upto 40 jets during recent defence dialogues in Islamabad. Saudi Arabia isreportedly considering converting billions in loans into a JF-17 purchase,further deepening bilateral military ties. Analysts attribute this interestto the jet’s combat-proven performance, particularly following regionalconflicts in 2025 that demonstrated its reliability and versatility indiverse operational environments.
The economic implications of these defence exports are profound, as theydirectly bolster foreign exchange reserves and reduce pressure on thecurrency. Malik Bostan emphasised that increased inflows from suchhigh-value deals would accelerate the Rupee’s appreciation trajectory. Asof mid-January 2026, the USD/PKR exchange rate hovers around Rs280 in theinterbank market, reflecting stability after earlier volatility. TheRupee’s recovery from Rs340 levels has been supported by improvedremittances, export growth, and policy measures, but defence revenuesrepresent a transformative new stream that could push rates substantiallylower in the coming months.
Complementing the defence export boom is the remarkable performance ofPakistan’s stock market, which has provided additional economic momentum.The benchmark KSE-100 index has surged dramatically from around 46,000points to nearly 185,000 points in recent periods, marking one of the mostimpressive rallies in its history. This fourfold increase reflects investorconfidence in macroeconomic improvements, including inflation control,interest rate adjustments, and enhanced external sector stability. Thestock market’s strength has attracted domestic and foreign investment,further supporting liquidity and contributing to overall economicresilience.
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Experts view these intertwined developments as a positive feedback loop forPakistan’s economy. Rising defence exports not only generate immediateforeign currency but also enhance the country’s global image as a reliablesupplier of advanced military technology. This, in turn, stimulatesinvestor sentiment, as evidenced by the KSE-100’s sustained upward trenddespite occasional volatility. With the index approaching or brieflytouching all-time highs near 188,000 points earlier in January 2026, marketparticipants anticipate continued gains if export deals materialise asprojected.
While challenges persist, including geopolitical risks and the need forcontinued policy discipline, the outlook remains cautiously optimistic. Thecombination of defence sector success and financial market vitalitypositions Pakistan to potentially achieve greater economic sovereignty. Asmore countries finalise JF-17 acquisitions, the resultant inflows couldindeed drive the Dollar below Rs250, marking a significant milestone in thenation’s currency stability journey and underscoring the strategicimportance of indigenous defence manufacturing.
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