KARACHI: The Pak Rupee (PKR) depreciated by 21 paisas against the dollar on Monday, closing at Rs170.74 in the interbank foreign exchange market. This decline followed Friday’s closing rate of Rs170.53, reflecting a surge in dollar demand for external payments.
Currency experts noted that the rupee faced pressure as the market reopened after the weekend. The increased dollar demand was primarily driven by import-related transactions and rising external obligations. Additionally, the country’s significant trade deficit further exacerbated the strain on the rupee.
Pakistan’s import bill rose sharply to $18.63 billion during the first quarter of the 2021/2022 fiscal year (July–September), a substantial increase from $11.28 billion during the same period last year. This widening trade gap has added to the persistent challenges facing the rupee, with imports outweighing export earnings.
Since the beginning of the current fiscal year, the rupee has fallen by Rs13.20, or 8.38 percent, against the dollar. On June 30, 2021, the rupee stood at Rs157.54 to the dollar, showcasing the steep depreciation the currency has experienced over the months. On October 6, 2021, the rupee hit an all-time low of Rs170.96 in the interbank market, underscoring the volatility in the exchange rate.
Dealers have pointed out that while the rupee continues to face external pressures, the State Bank of Pakistan (SBP) has taken measures to address these challenges. Recent steps include policies to curb unnecessary dollar outflow and support the balance of payments. However, experts argue that these measures need to be complemented by structural economic reforms to reduce reliance on foreign currency.
Despite these interventions, the rupee’s performance remains under strain, primarily due to rising global commodity prices and the strengthening of the dollar in international markets. Sustaining the rupee’s value will require consistent efforts to boost exports, manage imports, and attract foreign investments.
As Pakistan’s economic challenges persist, the rupee’s fluctuations continue to reflect broader macroeconomic vulnerabilities, making currency stabilization a key priority for policymakers.
