Karachi, June 28, 2023: The Pakistan Rupee (PKR) has experienced its highest-ever annual fall against the US dollar during the fiscal year 2022-23, with a depreciation of 28 percent, according to analysts at Arif Habib Limited.
This significant decline in the value of the PKR was primarily attributed to challenges posed by debt repayments, resulting in the depletion of reserves, as well as a considerable decline in capital inflows.
At the start of the fiscal year, the rupee was valued at PKR 204.85 against the US dollar. However, by the end of June 27, 2023, it had weakened to PKR 285.99. Throughout the year, the local currency reached an all-time low of PKR 298.93 against the dollar on May 11, 2023.
The substantial depreciation of the PKR against the US dollar has been a cause for concern, as it impacts various aspects of the economy, including imports, inflation, and external debt. The increased cost of imports due to a weaker currency can lead to higher prices for goods and services within the country. Furthermore, it adds pressure to the balance of payments and the country’s external debt burden.
The challenges faced by Pakistan in meeting debt repayments and the decline in capital inflows have played a significant role in the rupee’s depreciation. To address this issue, the government may need to explore measures to attract foreign investment, strengthen reserves, and improve the country’s export competitiveness.
The current depreciation of the PKR highlights the need for effective economic management and policies to stabilize the currency and strengthen the overall economic situation in Pakistan. It remains to be seen how the government and relevant authorities will respond to mitigate the impact of the depreciation and work towards ensuring a more stable exchange rate in the future.
Interbank Closing Exchange Rate on June 27: PKR 285.99 to USD
