Karachi, August 2, 2023 – The Pakistani Rupee (PKR) experienced a decline against the US dollar for the third consecutive day, closing at PKR 289.38 in the interbank foreign exchange market on Wednesday.
This decline of PKR 1.84 comes despite the country’s rising foreign exchange reserves.
Over the past three sessions, the local currency has lost PKR 2.93, starting from a level of PKR 286.45 on July 27, 2023. The continuous depreciation of the PKR has raised concerns within the financial community and businesses in Pakistan.
READ MORE: Rupee Continues to Dwindle Against US Dollar, Closes at PKR 287.54 in Interbank Battle
One of the contributing factors to the devaluation is the mounting payment demands for imports and corporate transactions, which have been steadily increasing. The government’s relaxed import policy has further fueled the demand for the US dollar, exacerbating the situation.
Additionally, a major cause for concern is the decline in foreign exchange reserves. The State Bank of Pakistan (SBP) reported a significant reduction of $530 million in foreign exchange reserves for the week ending on July 21, 2023. The total reserves stood at $13.534 billion, down from $14.065 billion a week earlier on July 14, 2023.
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In response to the growing economic challenges, Pakistan’s Finance Minister, Muhammad Ishaq Dar, has announced a plan to boost the country’s foreign exchange reserves to $15 billion within the next seven weeks. This measure is aimed at stabilizing the currency and reinforcing Pakistan’s economic position.
The government and relevant authorities are closely monitoring the situation and are prepared to implement further measures to mitigate the effects of the PKR’s depreciation. They acknowledge that global economic conditions and factors influencing foreign exchange markets will also play a crucial role in determining the future trajectory of the PKR against major currencies.
READ MORE: Pakistani Rupee Shows Modest Gain Against US Dollar
Investors and traders are urged to exercise caution and stay informed about the latest updates in the foreign exchange market. Fluctuations in currency value can have a profound impact on trade, investments, and overall economic stability. Keeping abreast of the developments in the foreign exchange market will enable them to make well-informed decisions.
READ MORE: Chinese Assistance Helps PKR Resist Dollar After 8-Day Losing Streak
As the situation remains dynamic, market participants and businesses in Pakistan are keeping a close watch on the foreign exchange market. The government’s efforts to bolster foreign exchange reserves and the impact of global economic conditions will be critical in determining the future performance of the PKR against the US dollar and other major currencies.
