The Pakistani Rupee faced a sharp drop against the US Dollar today, starting at 304 in the official market. At noon, it fell even further, hitting 307.925, losing approximately Rs. 4 against the US Dollar, in line with the opening drop.
Around 1:30 PM to 2:30 PM, it managed to recover slightly, stabilizing at the 305 level for the rest of the day. Since the interim government took office, the US Dollar has gained Rs. 16.02 against the Pakistani Rupee.
In the open market, rates were documented in the 308-314 range. By the end of the day, the Pakistani Rupee strengthened by 0.02 percent to close at 305.47, gaining seven paisas against the US Dollar. In the black market, the exchange rate has moved further away from the official rate, trading in the 325-331 range. Currency dealers expect a slower decline until the Pakistani Rupee reaches a more stable level. September might see record lows ranging from 310 to 320, following the trend from August, unless there is an improvement in the economic situation.
It’s worth noting that the Pakistani Rupee has fallen by nearly Rs. 85 since January 2023 and over Rs. 132 since April 2022 against the US Dollar. According to today’s exchange rate movements, the Pakistani Rupee has gained seven paisas against the US Dollar.
The rapid decline in the value of the Pakistani Rupee in 2023 can be attributed to a combination of factors, including premature easing of imports, declining exports, and a shift of home remittances to informal channels. This has created a strong demand for US Dollars by smugglers and unregulated traders, contributing to the currency’s devaluation.
The Pakistan Business Council describes this exchange rate decline as a significant challenge for Pakistan’s economy. Traders also note that the frequent withdrawals from the State Bank of Pakistan’s reserves indicate a decrease in the documented dollar volume, as the popularity of informal money transfer methods (hawala) has tempted many to seek higher profits. The black market rate, which reached above 330 on Friday, indicates a widening gap between the official and unofficial exchange rates, undermining the regulator’s efforts to unify the rates.
In today’s official market, the Pakistani Rupee gained ground against most major currencies. It strengthened by one paisa against the Australian Dollar (AUD), one paisa against the Saudi Riyal (SAR), two paisas against the UAE Dirham (AED), 54 paisas against the British Pound (GBP), and Rs. 1.17 against the Euro (EUR). However, it lost 60 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.