KARACHI: The US dollar surged to Rs167.63 against the Pakistani Rupee (PKR) on Tuesday in the interbank foreign exchange market, marking a significant rise that places it near its all-time high of Rs168.44, recorded on August 26, 2020.
The Pak Rupee (PKR) closed at Rs167.63 to the dollar, weakening from the previous day’s closing value of Rs167.23. This depreciation highlights a challenging phase for the local currency, which has now slipped to its lowest value in over a year against the dollar.
Since the beginning of the current fiscal year on July 1, 2021, the rupee has shed Rs10.09 against the dollar, underlining the persistent pressure on the exchange rate. This downward trend reflects increased demand for the dollar in the interbank market.
Currency market analysts attribute the sustained demand for the dollar to growing import payment obligations. The easing of COVID-19 restrictions has spurred economic activity, driving up the demand for imported raw materials and finished goods. As industries and businesses resume operations at full capacity, the need for dollar-denominated imports has surged, placing additional strain on the local currency.
The continued depreciation of the rupee against the dollar has raised concerns among stakeholders about its impact on inflation and the cost of imports. A weaker rupee makes dollar-denominated imports more expensive, potentially driving up the prices of essential goods and services.
Despite the pressure on the local currency, experts are hopeful that measures such as enhanced remittance inflows and support from international financial institutions could help stabilize the exchange rate. However, in the short term, the dollar is expected to remain strong against the rupee, primarily due to external payment obligations and volatile global currency trends.
The dollar’s value remains a critical factor in shaping Pakistan’s economic landscape, influencing trade, inflation, and overall fiscal stability. Market participants are closely monitoring developments in the foreign exchange market, as any further rise in the dollar’s value could pose additional challenges for the economy.