Pakistani rupee breaks all records, surges past 300 against the dollar

KARACHI: The Pakistani rupee surpassed the 300 mark against the US dollar in the interbank market on Thursday, based on data from the State Bank of Pakistan closing records.

The local currency reached a historic low of 300.22 due to increased demand for the dollar, triggered by relaxed import restrictions and growing concerns about financing the country’s current account deficit.

According to the Exchange Companies Association of Pakistan (ECAP), the USD is trading at Rs316 in the open market, resulting in a difference of Rs15.75 — 5.25% — between the interbank and open market rates.

The previous day, the currency fell to 299.64 against the USD, marking a 0.21% drop from the previous day’s closing rate of 299.01.

Economic expert and former adviser to the finance minister, Dr. Khaqan Najeeb, explained that the release of stored containers, declining exports and remittances, and a dollar liquidity crunch are contributing to the pressure. The interbank market is striving to align with the kerb market, as Pakistan has committed to a structural benchmark with the International Monetary Fund, keeping the difference between the two markets within 1.25% on average over five days.

Dr. Najeeb also highlighted the influence of dollarization and the perception of the dollar as a store of value. He noted that the monetary policy’s impact on encouraging people to hold the rupee has lagged behind.