Pakistani rupee extends losses against US dollar, ending at PKR 285.82

Pakistani rupee extends losses against US dollar, ending at PKR 285.82

The Pakistani Rupee (PKR) faced further depreciation against the US dollar, falling by 20 paisas on Friday. This decline is attributed to a scarcity of inflows, resulting in a decrease in foreign exchange reserves.

The exchange rate closed at PKR 285.82 to the dollar, marking a decline from the previous day’s closing of PKR 285.62 in the interbank foreign exchange market.

READ MORE: Pakistani Rupee records 22 paisas decline against dollar on May 18, 2023

Pakistan’s foreign exchange reserves decreased by $52 million to reach $9.938 billion for the week ending May 12, 2023. This decline is significant, considering the previous week’s reserves of $9.99 billion on May 5, 2023. Over the past months, the country has experienced a substantial decrease of $17.29 billion in foreign exchange reserves since reaching a record high of $27.228 billion on August 27, 2021.

Experts in the currency market attribute the depreciation of the rupee to the heightened demand for the US dollar, particularly in relation to import and corporate payments. Additionally, concerns surrounding the ongoing International Monetary Fund (IMF) program have added pressure to the local currency.

READ MORE: Pakistani rupee weakens against dollar, ending at PKR 285.40 in Interbank

Despite positive reports indicating a current account surplus in April 2023, the Pakistani Rupee experienced a decline. The previous week was marked by significant volatility, with the rupee reaching its lowest level against the dollar at PKR 298.93 on May 11, 2023. However, the currency rebounded strongly the following day.

Currency experts are closely monitoring these developments and urging the government to take decisive measures to stabilize the rupee and restore investor confidence. These measures may involve implementing effective economic policies, addressing corruption concerns, and establishing a transparent and predictable investment environment.

Constructive dialogue with the IMF is deemed crucial for the Pakistani government to secure a much-needed loan program. To alleviate concerns about the economy and bolster the rupee’s value in the international market, the government must demonstrate a commitment to fiscal discipline, implement structural reforms, and ensure good governance.

READ MORE: Rupee ends firmer against dollar in interbank on May 16, 2023

It is important to note that currency fluctuations are not unique to Pakistan, as several emerging economies have faced similar challenges in recent years. The government’s response and its ability to address the underlying causes of the rupee’s depreciation will play a pivotal role in achieving financial stability and restoring confidence in the Pakistani Rupee.

The Pakistani Rupee continues to face losses against the US dollar, reaching PKR 285.82. The scarcity of inflows and declining foreign exchange reserves have contributed to this depreciation. Urgent measures are needed to address Pakistan’s ongoing balance of payment crisis and stabilize the rupee.

READ MORE: PKR gains 11 paisas to dollar at interbank closing on May 15, 2023

Constructive engagement with the IMF, implementation of effective economic policies, and a transparent investment environment are essential for restoring investor confidence and achieving financial stability.