KARACHI: The troubled economy of the country resulted in Pakistani Rupee (PKR) to weaken by 48 per cent against the UAE Dirham (AED) during last one year, according to data released by the State Bank of Pakistan (SBP).
The local currency fell by PKR 23.32 against the AED to end at PKR 71.50 on January 27, 2023 as compared with PKR 48.18 at the closing on same day last year in interbank foreign exchange market.
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Pakistan is facing worst economic crisis in decades. The falling foreign exchange reserves and uncertain political conditions created more miseries for the beleaguered economy.
The UAE is major destination for Pakistani workers and remittances are major source of foreign inflows for Pakistan. However, during past couple of months the uncertain conditions the flow of formal channels are declining.
READ MORE: Pakistani rupee crashes against dollar, makes new interbank low at PKR 262.60
The inflows of remittances to Pakistan from the UAE fell by 13.5 per cent to $2.60 billion during first half (July – December) of fiscal year 2022-2023 as compared with $3 billion in the same half of the last fiscal year.
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The Pakistani government about five months back imposed an unofficial cap on the dollar rates in order to control inflation. However, this resulted in a huge gap of exchange rate between interbank and open market. Besides, it also resulted in creation of black market.
Reportedly, money transfers through illegal channels such as Hawala and Hundi were also on the rise because people were getting much higher rate in the grey market rather than through official channels.
