Karachi, August 11, 2023 – The Pakistani Rupee (PKR) faced another challenging day as it continued its decline against the US dollar, closing at PKR 288.49 in the interbank foreign exchange market.
This represents a significant drop of 89 paisas from the previous day’s closing rate of PKR 287.60 against the dollar.
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This downward trend has been ongoing for two consecutive sessions, largely attributed to the political instability following the dissolution of the national assembly. The inability of political parties to agree on an interim setup has fueled uncertainty, which in turn has put pressure on the local currency.
Adding to these concerns is the recent decision by the State Bank of Pakistan (SBP) to allow commercial banks to initiate import payments by opening letters of credit. This policy shift has strained the Pakistani rupee even further, contributing to its depreciation.
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Another contributing factor to the rupee’s fall is the decline in foreign exchange reserves. The country’s foreign exchange reserves stand at $13.34 billion for the week ending on August 4, 2023, reflecting a reduction of $125 million compared to the previous week’s position of $13.464 billion as of July 27, 2023. This drop raises apprehensions about Pakistan’s ability to manage its import requirements and maintain the stability of the rupee on the global currency market.
READ MORE: Pakistani Rupee Slides to PKR 287.91 Against US Dollar
Amidst this backdrop, market participants, investors, and traders are being advised to exercise caution and stay well-informed about foreign exchange rates. The volatile situation highlights the potential widespread impact on trade, investments, and the overall economy.
Key stakeholders, both domestic and international, are keeping a close watch on the government’s efforts to bolster reserves and the influence of global economic factors on the performance of the Pakistani rupee in the coming days. The stability of the rupee will remain a crucial factor with far-reaching implications for the nation’s economic landscape.
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