Karachi, August 16, 2023 – The Pakistan rupee took a steep dive, reaching an alarming level of PKR 294.93 against the US dollar in today’s interbank foreign exchange market.
This downward spiral is bringing the local currency dangerously close to its all-time low of PKR 298.93, set on May 11, 2023.
READ MORE: Pakistani Rupee Plunges to PKR 291.51 Against Dollar on First Day of Interim Government
In a swift decline of PKR 3.42 from the previous day’s closing rate of PKR 291.51, the rupee’s freefall shows no signs of abating. Experts attribute this plummeting performance to an escalated demand for the dollar, as the rupee grapples with mounting challenges.
A pivotal contributing factor to this dire situation is the recent policy shift by the State Bank of Pakistan (SBP), which has authorized commercial banks to initiate import payments through the opening of letters of credit. This change has exerted even more pressure on the already fragile rupee, hastening its depreciation.
READ MORE: Rupee Struggles Against Dollar, Falls to PKR 288.49 in Interbank
The dwindling foreign exchange reserves of Pakistan have also played a critical role in this distressing trend. As of August 4, 2023, the nation’s foreign exchange reserves stand at a concerning $13.34 billion, marking a decline of $125 million compared to the previous week’s figure of $13.464 billion as of July 27, 2023. This worrisome trajectory raises serious questions about the country’s ability to manage imports and uphold the rupee’s stability in the global currency arena.
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Financial experts are sounding the alarm, urging caution among market participants, investors, and traders. The unprecedented volatility underscores the potentially far-reaching repercussions on trade, investments, and the broader economic landscape.
Both domestic and international stakeholders are closely monitoring the government’s efforts to bolster reserves, while simultaneously assessing the impact of global economic dynamics on the Pakistani rupee’s trajectory. The stability of the rupee looms as a critical factor with profound implications for the nation’s economic outlook.
READ MORE: Rupee Recovers Against Dollar Prior to National Assembly Dissolution
The coming days will be crucial as Pakistan navigates through these turbulent waters, seeking ways to stabilize the rupee and secure its economic future in the face of these formidable challenges.
