Karachi, August 25, 2023 – The Pakistani Rupee (PKR) continued its downward spiral on Friday, making a fresh historic low against the US dollar.
In intraday trading on the interbank foreign exchange market, the rupee reached a new nadir, plummeting to PKR 301 to the dollar.
READ MORE: US Dollar Makes Historic High at PKR 300.22 in Interbank Closing
This relentless decline marked a significant 78 paisas drop in the rupee’s value, highlighting the immense pressure the local currency is facing against the greenback. Experts attribute this free-fall to a multitude of factors, primarily the surging demand for the US dollar driven by increased imports and corporate payments.
Currency analysts have been closely monitoring the situation and emphasize that the dwindling foreign exchange reserves have been a pivotal factor exerting stress on the rupee’s value. Just a day earlier, the State Bank of Pakistan (SBP) reported a substantial decrease in the country’s foreign exchange reserves. The figures indicated a decline of $131 million for the week ending August 18, 2023.
The SBP’s report revealed that foreign exchange reserves had dropped to $13.248 billion by the week ending August 18, 2023, in stark contrast to the previous week’s figure of $13.379 billion, recorded on August 11, 2023. Notably, this current level of foreign exchange reserves pales in comparison to the peak observed in August 2021 when Pakistan boasted a robust reserve of $27.2 billion.
This dramatic contrast underscores the ongoing economic challenges faced by Pakistan and raises concerns about the country’s ability to maintain a stable economic foundation. The rapid depreciation of the rupee, coupled with declining foreign exchange reserves, has led to uncertainty in the financial markets and concerns about inflation.
READ MORE: Pakistani Rupee Hits Historic Low of PKR 299.01 to US Dollar at Interbank Closing
The government and financial authorities are under growing pressure to implement effective measures to stabilize the rupee and bolster foreign exchange reserves. Economists argue that a multi-pronged approach, including boosting exports, attracting foreign investment, and controlling imports, is essential to address the root causes of the rupee’s free-fall.
As the PKR continues its downward trajectory, policymakers are facing a daunting task to restore confidence in the local currency and steer the economy towards a path of sustainable growth. The coming weeks will be critical in determining the effectiveness of these measures in arresting the rupee’s decline and safeguarding Pakistan’s economic stability.
READ MORE: Rupee Plunges to PKR 297.13 Against Dollar, Nears Historic Low in Interbank
