Karachi, August 22, 2023 – The Pakistani Rupee (PKR) plunged to an unprecedented low against the US dollar today, reaching PKR 299 in intraday trading at the interbank market.
This represents a significant decline of PKR 1.87 paisas compared to yesterday’s closing rate of PKR 297.13 in the interbank foreign exchange market.
READ MORE: Rupee Plunges to PKR 297.13 Against Dollar, Nears Historic Low in Interbank
Financial experts are pointing to several factors behind this alarming decline. The surge in demand for the US Dollar for import purposes and corporate payments has exerted immense pressure on the local currency. Additionally, concerns about dwindling foreign exchange reserves and impending government repayments for foreign debt have intensified the rupee’s depreciation.
The situation is causing widespread concern as the rupee’s value nears its historic low of PKR 298.93, which was last recorded on May 11, 2023. One significant factor contributing to this precarious situation is a recent policy adjustment by the State Bank of Pakistan (SBP). This adjustment allows commercial banks to initiate import payments through letters of credit, which has further strained the already vulnerable rupee, hastening its decline.
READ MORE: Rupee Dips Sharply Against Dollar, Hits PKR 295.78 Mark in Interbank Trading
Furthermore, the limited foreign exchange reserves have played a role in the US Dollar’s ascent. The most recent data from the State Bank of Pakistan indicates a slight improvement in the country’s foreign exchange reserves, reaching $13.38 billion by the week ending August 11, 2023. This represents an increase of $40 million compared to the previous week’s reserves of $13.34 billion. However, it remains significantly lower than the peak of $27.2 billion observed in August 2021.
READ MORE: Rupee Maintains Firmness Against Dollar, Closes at PKR 294.92
Financial experts are advising caution among various stakeholders, including market participants, investors, and traders. The escalating volatility in the exchange rate raises concerns about potential far-reaching implications for trade, investments, and the overall economic landscape.
As the situation continues to evolve, close attention will be necessary to assess the direction of the rupee and its impact on the broader financial health of the nation. Authorities are expected to closely monitor and take measures to stabilize the currency and restore confidence in Pakistan’s economic stability.
READ MORE: Pakistani Rupee Nears Record Low, Plunges to PKR 294.93 Against US Dollar
