On May 18, 2023, the Pakistani Rupee (PKR) witnessed a decline of 22 paisas against the US dollar in the interbank foreign exchange market, closing at PKR 285.62 compared to the previous day’s closing of PKR 285.40.
Currency analysts attribute this depreciation to the heightened demand for the US dollar in relation to import and other 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 preceding week was marked by significant volatility, with the rupee reaching its lowest level against the dollar at PKR 298.93 on May 11, 2023, but rebounding strongly the following day.
Experts in the currency market are closely monitoring these developments and highlighting the need for decisive measures by the government to stabilize the rupee and restore investor confidence. Such measures may involve implementing effective economic policies, addressing corruption concerns, and establishing a transparent and predictable investment environment.
READ MORE: Rupee ends firmer against dollar in interbank on May 16, 2023
Constructive dialogue with the IMF is deemed crucial for the Pakistani government to secure a much-needed loan program. Demonstrating a commitment to fiscal discipline, implementing structural reforms, and ensuring good governance are vital steps in alleviating concerns about the economy and bolstering the rupee’s value in the international market.
READ MORE: PKR gains 11 paisas to dollar at interbank closing on May 15, 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.
READ MORE: Pakistani Rupee surges with historic single-day recovery of PKR 13.85 against dollar
