Karachi, October 24, 2023 – The Pakistani Rupee faced its second consecutive fall against the US dollar on Tuesday, highlighting mounting pressure on the nation’s import payments.
After ending at PKR 278.80 on October 20, 2023, the local currency saw a loss of PKR 0.63 against the US dollar in the last two sessions.
On a daily basis, the rupee depreciated by 30 paisas, concluding at PKR 279.43 to the dollar, down from the previous day’s closing rate of PKR 279.12 in the interbank foreign exchange market.
Currency analysts attribute this depreciation primarily to the surging demand for the US dollar, driven by the need for imports and corporate payments. They emphasize that the government’s scheduled external debt payments and increased consumption of raw materials linked to accelerated economic activities within the country may further amplify the demand for the US dollar in the coming days.
It is worth noting that the Pakistani Rupee has displayed resilience over the past six weeks, primarily due to administrative measures implemented by the central bank and the government of Pakistan. The local currency has managed to appreciate by PKR 27.67 or 9.10% against the US dollar since reaching its lowest point at PKR 307.10 on September 5, 2023.
Financial experts and economists have expressed concerns regarding the need to bolster the country’s foreign exchange reserves to ensure the long-term stability of the Pakistani Rupee. These reserves play a vital role in weathering economic uncertainties, safeguarding against external shocks, and maintaining a balanced foreign exchange market. Accumulating an adequate reserve of foreign currency can better protect the Rupee from unforeseen fluctuations and maintain a favorable trade balance.
The recent fluctuation in the exchange rate serves as a reminder of the delicate balance Pakistan must strike between ensuring access to foreign currency for essential imports and preserving the value of the Rupee. The central bank and the government continue to play a critical role in this dynamic by implementing measures to maintain exchange rate stability and overseeing the responsible management of foreign exchange reserves.
Despite this temporary dip in the Pakistani Rupee’s value, analysts remain cautiously optimistic about the country’s economic prospects. The strong gains made over the last several weeks underscore the potential for resilience and growth within the Pakistani economy, especially as it rebounds from the challenges posed by the global economic landscape.
Pakistani Rupee Eases to PKR 279.12 Amid Week’s Start Dollar Demand
