Karachi, August 10, 2023 – The Pakistani Rupee (PKR) experienced a downward shift against the US dollar on Thursday following the unexpected dissolution of the National Assembly.
The exchange rate saw a decline of 14 paisas, closing at PKR 287.60 against the dollar in the interbank foreign exchange market, compared to the previous day’s closing of Rs 287.46.
READ MORE: Rupee Recovers Against Dollar Prior to National Assembly Dissolution
Currency experts attributed this volatility to the uncertain interim setup that ensued after the dissolution of the national assembly. The legislative assembly of Pakistan was dissolved a few days before its scheduled tenure completion, as President Dr. Arif Alvi approved the prime minister’s advice to dissolve the assembly.
A recent decision by the State Bank of Pakistan (SBP) to allow commercial banks to initiate import payments by opening letters of credit has further strained the local currency.
READ MORE: Pakistani Rupee Slides to PKR 287.91 Against US Dollar
In addition, declining foreign exchange reserves have added pressure to the exchange rate. As of July 27, 2023, Pakistan’s foreign exchange reserves had decreased to $13.464 billion, marking a decline of $70 million from the previous week. The State Bank of Pakistan’s reserves stood at $8.154 billion, showing a $32 million decrease from the prior week.
READ MORE: Pakistani Rupee Drops Against US Dollar on High Demand
Market participants, investors, and traders are urged to exercise caution and stay well-informed about foreign exchange rates. Currency fluctuations can have widespread repercussions on trade, investments, and the overall economy. Given the fluidity of the situation, businesses within Pakistan are closely monitoring the foreign exchange market.
READ MORE: Rupee Extends Gains Against Dollar, Closing at PKR 286.97 in Interbank Market
The government’s efforts to bolster reserves and global economic factors will play a pivotal role in determining the PKR’s performance against the US dollar and other key currencies in the days ahead. The stability of the rupee will be a crucial factor for both domestic and international stakeholders.
