Karachi, August 28, 2023 – In a concerning development for Pakistan’s economy, the US dollar soared to a historic high of PKR 302 at the close of the interbank foreign exchange market on Monday, August 28.
This marked a significant increase from the PKR 301 exchange rate recorded at the end of last week.
READ MORE: Pakistani Rupee Hits All-Time Low at PKR 301 to Dollar in Interbank Market Closing
Financial experts are attributing this persistent decline in the value of the Pakistani Rupee to the country’s dwindling foreign exchange reserves. The State Bank of Pakistan (SBP) has reported a substantial decrease in these reserves, deepening concerns over the nation’s economic stability.
According to the latest data released by the SBP, foreign exchange reserves experienced a sharp decline of $131 million for the week ending August 18, 2023. This decline saw the reserves drop from $13.379 billion, as reported on August 11, 2023, to a mere $13.248 billion by August 18, 2023. This stark reduction is in stark contrast to the situation observed in August 2021 when Pakistan boasted a robust reserve of $27.2 billion.
READ MORE: US Dollar Makes Historic High at PKR 300.22 in Interbank Closing
The substantial decline in foreign exchange reserves has highlighted the ongoing economic challenges facing Pakistan and has raised serious concerns about the nation’s ability to maintain a stable economic foundation. The rapid depreciation of the rupee, combined with diminishing foreign exchange reserves, has triggered uncertainty in financial markets and heightened worries about inflation.
With mounting pressure, the government and financial authorities are now tasked with implementing effective measures to stabilize the rupee and bolster foreign exchange reserves. Economists are advocating for a comprehensive approach, which includes efforts to boost exports, attract foreign investment, and control imports, to address the root causes of the rupee’s continuous decline.
READ MORE: Pakistani Rupee Hits Historic Low of PKR 299.01 to US Dollar at Interbank Closing
As the Pakistani Rupee continues its downward trajectory, policymakers face the daunting challenge of restoring confidence in the local currency and steering the economy towards sustainable growth. The upcoming weeks will be pivotal in evaluating the effectiveness of these measures in halting the rupee’s decline and safeguarding Pakistan’s economic stability. Observers from around the world will closely monitor these developments as Pakistan strives to navigate its current economic challenges.
