Karachi, September 4, 2023 – The Pakistani Rupee (PKR) experienced a decline of 17 paisas against the US dollar on Monday, reaching a new historic low of PKR 305.64 in the interbank foreign exchange market.
This decline represents a new low for the local currency, surpassing the previous historic low of PKR 305.54 recorded on August 31, 2023. Currency analysts attribute this depreciation to the growing demand for import payments and the uncertain external payment situation in the country.
READ MORE: Pakistani Rupee Ends 10-Day Losing Streak Against US Dollar, Settles at PKR 305.47
The depreciation of the rupee has had adverse effects on domestic prices, particularly in the context of fuel prices. The caretaker government had previously announced a significant increase in petroleum prices due to the currency’s volatility.
Additionally, the fluctuating exchange rate has raised concerns about Pakistan’s ability to meet its foreign obligations, given the consistent decline in foreign exchange reserves. According to the central bank’s report on August 31, Pakistan’s foreign exchange reserves decreased by $77 million in just one week.
READ MORE: Pakistani Rupee Hits New Low at PKR 305.54 Against the Dollar in Persistent Slide
The State Bank of Pakistan (SBP) disclosed that the country’s foreign exchange reserves dropped to $13.171 billion during the week ending August 25, 2023, down from $13.248 billion in the previous week (August 18, 2023). This substantial depletion of foreign exchange reserves underscores the ongoing economic challenges facing Pakistan.
READ MORE: Rupee Freefall Continues: Hits New Record Low at PKR 304.45 Against the Dollar
The rapid depreciation of the rupee, combined with diminishing foreign exchange reserves, has created uncertainty in financial markets and heightened concerns about inflation. Addressing these challenges will be crucial for stabilizing Pakistan’s economic foundation and ensuring sustainable growth in the coming months.
READ MORE: Rupee Depreciation Continues for 8th Straight Day; Hits New Low at PKR 303.05 to Dollar
