Pakistani Rupee weakens by 26 paisas against dollar in interbank on May 8, 2023

Pakistani Rupee weakens by 26 paisas against dollar in interbank on May 8, 2023

The Pakistani Rupee (PKR) experienced a decline on Monday, weakening by 26 paisas against the US dollar and closing at PKR 283.85 compared to the previous closing ofPKR 283.59.

The fall in the rupee value may be attributed to the higher demand for dollars as the market opened after weekly holidays, as well as the uncertain talks with the International Monetary Fund (IMF).

READ MORE: Interbank closing rate May 5, 2023: PKR appreciates by 23 paisas against dollar

Despite the recent contraction in the import bill, which was a result of government efforts to reduce non-essential imports and promote domestic production, investors remain concerned about the ongoing political uncertainty surrounding election date issues and conflicts between parliament and the Supreme Court. Moreover, declining remittances and foreign exchange reserves are also contributing to these concerns.

READ MORE: Dollar eases to PKR 283.88 at interbank closing on May 3, 2023

During the first ten months of fiscal year 2022-2023, Pakistan’s import bill decreased by over 28 percent, leading to a contraction of the trade deficit by approximately 40 percent during the same period. These positive developments are a result of the government’s efforts to control non-essential imports, increase exports, and promote domestic production, thereby reducing the country’s dependence on imports and saving foreign exchange reserves.

READ MORE: Dollar rebounds to PKR 283.92 at interbank closing on May 2, 2023

However, the government must continue its efforts to maintain a sustainable trade balance and resolve political conflicts, in addition to securing financial assistance and support from international organizations and friendly countries. Positive developments, such as IMF assurances, funding commitments from Saudi Arabia and the UAE, and the ease of import and corporate payments ahead of Eid holidays, have eased some concerns.

READ MORE: PKR makes gain against dollar amid easing political tension

In conclusion, the slight upward trend in the PKR’s value against the US dollar is a positive development, primarily due to the decline in the import bill. However, ongoing political and economic challenges have put pressure on the exchange rate, and the government must continue to make efforts to address these challenges and maintain a sustainable economic outlook.