Karachi, October 25, 2023 – The Pakistani Rupee experienced its third consecutive decline against the US dollar on Wednesday, signaling increased pressure on the country’s import payments.
The local currency concluded the day at PKR 279.88, marking a decrease of PKR 1.08 in comparison to the previous day’s closing rate of PKR 278.80.
As of October 25, 2023, the Pakistani Rupee has depreciated by PKR 1.71 against the US dollar over the past three trading sessions. Currency analysts attribute this decline primarily to the rising demand for the US dollar, stemming from the necessity for imports and corporate transactions.
They emphasize that the government’s planned external debt payments and the heightened consumption of raw materials related to the accelerated economic activities in the country may further drive the demand for the US dollar in the days ahead.
It is noteworthy that the Pakistani Rupee has demonstrated resilience over the past six weeks, largely due to measures taken by the central bank and the Pakistani government.
Since reaching its lowest point at PKR 307.10 on September 5, 2023, the local currency has appreciated by PKR 27.67, representing a 9.10% increase against the US dollar.
Financial experts and economists have voiced concerns regarding the imperative to bolster the nation’s foreign exchange reserves to ensure the long-term stability of the Pakistani Rupee.
These reserves play a pivotal role in mitigating economic uncertainties, providing a safeguard against external shocks, and maintaining a stable foreign exchange market.
The accumulation of sufficient foreign currency reserves can better shield the Rupee from unforeseen fluctuations and uphold a favorable trade balance.
The recent fluctuation in the exchange rate serves as a reminder of the delicate balance Pakistan must maintain between securing access to foreign currency for essential imports and preserving the Rupee’s value.
The central bank and the government continue to play a pivotal role in this dynamic, implementing measures to uphold exchange rate stability and overseeing the responsible management of foreign exchange reserves.
Despite this temporary depreciation of the Pakistani Rupee, analysts remain cautiously optimistic about the country’s economic prospects.
The substantial gains achieved over the past few weeks underscore the potential for resilience and growth within the Pakistani economy, especially as it recovers from the challenges posed by the global economic landscape.
