Karachi, August 30, 2023 – The Pakistani Rupee (PKR) continues its freefall against the US dollar, hitting a new low at PKR 304.45 on Wednesday.
This persistent depreciation, which began on August 17 at PKR 294.92 in the interbank foreign exchange market, has raised significant concerns among financial experts and policymakers alike.
READ MORE: Rupee Depreciation Continues for 8th Straight Day; Hits New Low at PKR 303.05 to Dollar
Financial analysts attribute this relentless decline of the Pakistani Rupee to the country’s dwindling foreign exchange reserves. The State Bank of Pakistan (SBP) reported a substantial decrease in these reserves, intensifying worries about the nation’s economic outlook.
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 starkly contrasts with the situation observed in August 2021 when Pakistan boasted a robust reserve of $27.2 billion.
READ MORE: Dollar Touches New Peak at PKR 302 Against Rupee in Interbank Closing on August 28
The significant depletion of foreign exchange reserves has highlighted 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: Pakistani Rupee Hits All-Time Low at PKR 301 to Dollar in Interbank Market 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.
READ MORE: US Dollar Makes Historic High at PKR 300.22 in Interbank Closing
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.
