Karachi, August 31, 2023 – The relentless ascent of the US dollar against the Pakistani Rupee (PKR) reached a new peak on Thursday, with the exchange rate surging to an unprecedented high of PKR 305.25 during intraday trading.
This surge represented an 80-paisa decline in the value of the rupee, as it was traded at PKR 305.25 against the dollar, compared to the previous day’s closing rate of PKR 304.45 in the interbank foreign exchange market.
READ MORE: Rupee Freefall Continues: Hits New Record Low at PKR 304.45 Against the Dollar
Financial analysts attribute this persistent depreciation of the Pakistani Rupee to the country’s diminishing foreign exchange reserves. The State Bank of Pakistan (SBP) recently reported a significant decline in these reserves, intensifying concerns about Pakistan’s economic prospects.
According to the latest data released by the SBP, foreign exchange reserves experienced a sharp drop of $131 million for the week ending August 18, 2023. This decline saw reserves plummet from $13.379 billion, as reported on August 11, 2023, to a mere $13.248 billion by August 18, 2023. This stark reduction stands in stark contrast to the situation observed in August 2021 when Pakistan boasted robust reserves totaling $27.2 billion.
READ MORE: Rupee Depreciation Continues for 8th Straight Day; Hits New Low at PKR 303.05 to Dollar
The substantial depletion of foreign exchange reserves has brought the ongoing economic challenges facing Pakistan into sharp focus, raising serious concerns about the country’s ability to maintain a stable economic foundation. The rapid depreciation of the rupee, combined with dwindling foreign exchange reserves, has heightened uncertainty in financial markets and exacerbated worries about inflation.
These developments underscore the pressing need for Pakistan to implement comprehensive economic reforms and address the issues contributing to the rupee’s decline and the depletion of foreign exchange reserves. The situation remains a focal point for policymakers and economists as they seek to stabilize the nation’s economic outlook and restore investor confidence.
READ MORE: Dollar Touches New Peak at PKR 302 Against Rupee in Interbank Closing on August 28
