Karachi, August 29, 2023 – The Pakistani Rupee (PKR) has continued its relentless decline against the US dollar for the eighth consecutive day, setting a new all-time low at PKR 303.05 in the interbank foreign exchange market.
This sustained depreciation of the local currency has sparked concerns about the nation’s economic stability.
READ MORE: Dollar Touches New Peak at PKR 302 Against Rupee in Interbank Closing on August 28
The rupee’s decline began on August 18 when it stood at PKR 295.78 in the interbank foreign exchange market. Since then, it has depreciated by a significant PKR 8.13 against the dollar, causing alarm among financial experts and policymakers.
Financial experts attribute this persistent depreciation of the Pakistani Rupee to the country’s dwindling foreign exchange reserves. The State Bank of Pakistan (SBP) has reported a substantial decrease in these reserves, intensifying worries about the nation’s economic outlook.
READ MORE: Pakistani Rupee Hits All-Time Low at PKR 301 to Dollar in Interbank Market Closing
According to the latest data released by the SBP, foreign exchange reserves experienced a sharp decline of $131 million for the week ending August 18, 2023. This reduction saw the reserves plummet from $13.379 billion, as reported on August 11, 2023, to a mere $13.248 billion by August 18, 2023. This drastic decrease sharply contrasts with the situation observed in August 2021 when Pakistan boasted a robust reserve of $27.2 billion.
The significant depletion of foreign exchange reserves has underscored the ongoing economic challenges facing Pakistan and raised serious concerns about the country’s ability to maintain a stable economic foundation. The rapid depreciation of the rupee, coupled with diminishing foreign exchange reserves, has triggered uncertainty in financial markets and heightened worries about inflation.
READ MORE: US Dollar Makes Historic High at PKR 300.22 in Interbank Closing
With mounting pressure, the government and financial authorities are now tasked with implementing effective measures to stabilize the rupee and bolster foreign exchange reserves. Economists are advocating for a comprehensive approach that includes efforts to boost exports, attract foreign investment, and control imports, addressing the root causes of the rupee’s continuous decline.
As the Pakistani Rupee continues its downward trajectory, policymakers face the daunting challenge of restoring confidence in the local currency and steering the economy toward sustainable growth. The upcoming weeks will be pivotal in evaluating the effectiveness of these measures in halting the rupee’s decline and safeguarding Pakistan’s economic stability. Observers from around the world will closely monitor these developments as Pakistan strives to navigate its current economic challenges.
