Karachi, August 25, 2023 – The Pakistani Rupee (PKR) hit an unprecedented low on Friday, closing at PKR 301 against the US dollar in the interbank foreign exchange market. This significant drop marks a 78 paisa depreciation in the rupee’s value compared to the previous day’s closing rate of PKR 300.22.
This alarming exchange rate sets a new record for the rupee’s weakest position against the US dollar in Pakistan’s history.
READ MORE: US Dollar Makes Historic High at PKR 300.22 in Interbank Closing
Financial experts and currency analysts have been closely monitoring this situation, attributing the rupee’s persistent decline to dwindling foreign exchange reserves. Just a day before this historic low, the State Bank of Pakistan (SBP) reported a substantial decrease in the country’s foreign exchange reserves.
According to the SBP’s report, foreign exchange reserves plummeted by $131 million for the week ending August 18, 2023. The data reveals a decline from $13.379 billion, recorded on August 11, 2023, to a mere $13.248 billion by August 18, 2023. This figure starkly contrasts with the peak observed in August 2021 when Pakistan boasted a robust reserve of $27.2 billion.
The drastic decline in foreign exchange reserves underscores the persistent economic challenges faced by Pakistan and raises serious concerns about the nation’s ability to maintain a stable economic foundation. The rapid depreciation of the rupee, combined with diminishing foreign exchange reserves, has triggered uncertainty in financial markets and heightened worries about inflation.
READ MORE: Pakistani Rupee Hits Historic Low of PKR 299.01 to US Dollar at Interbank Closing
Under increasing pressure, the government and financial authorities are tasked with implementing effective measures to stabilize the rupee and bolster foreign exchange reserves. Economists are advocating for a comprehensive approach, including boosting exports, attracting foreign investment, and controlling imports, to address the root causes of the rupee’s continuous decline.
READ MORE: Rupee Plunges to PKR 297.13 Against Dollar, Nears Historic Low in Interbank
As the PKR continues its downward trajectory, policymakers face the daunting challenge of restoring confidence in the local currency and steering the economy towards sustainable growth. The upcoming weeks will be pivotal in evaluating the effectiveness of these measures in halting the rupee’s decline and safeguarding Pakistan’s economic stability.
