US Dollar rates remain exceptionally volatile in the open market this week, with expectations of further expansion throughout the 2023-24 financial year. Today’s decline signals the continuation of the PKR’s downward trend toward 300 against the greenback.
Since July, trends have mostly been negative after the International Monetary Fund approved a $3 billion bailout package for Pakistan. Despite initially rising to 275.4, the PKR has seen an increase of around Rs. 23 against the
The black market rate also stands apart from the bank rate, trading between 310 and 315. Currency dealers predict further depreciation before the month of August concludes next week.
Notably, the rupee has weakened by nearly Rs. 78 since January 2023 and by over Rs. 125 against the dollar since April 2022. As observed from today’s exchange rate movements, the PKR has lost Rs. 1.35 against the dollar.
Additionally, Pakistan’s Real Effective Exchange Rate (REER) surged by 3.86 percentage points to 91.59 in July 2023.
With the current REER at 91.59, exports seem promising on paper. However, due to below-par imports of raw materials and machinery, local production struggles to rebound despite eased import restrictions. The government lifted import constraints nearly two months ago, yet manufacturers are still awaiting the necessary volume to revitalize production.
In the interbank market today, the PKR dipped against all major currencies. It lost 88 paisas against the Australian Dollar (AUD) and Rs. 2.10 against the British Pound (GBP).
Furthermore, it weakened by 35 paisas against the Saudi Riyal (SAR), 37 paisas against the UAE Dirham (AED), Rs. 1.29 against the Canadian Dollar (CAD), and Rs. 1.85 against the Euro (EUR).