Pakistani Rupee (PKR) has continued its historic fall against the US Dollar (USD) as it reaches Rs. 196 at its weakest level in the interbank market before closing with slight improvement at Rs. 195.74 on Tuesday. The Pakistani Rupee has maintained a downward trend for the eight successive working day amid the delay in the receipt of the next tranche of $1 billion from the International Monetary Fund.
The pressure on the Pakistani Rupee (PKR) continues to mount and the situation is likely to remain uncertain for the local currency. It bears mentioning that the Pakistani Rupee has maintained an overall downward trend against the US Dollar (USD) for the past 13 months as it lost 28.54% (Rs. 43.47) compared to the record high of Rs. 152.27 on May 2021.
According to analysts and experts, the main reason behind the depreciation of the Pakistani Rupee (PKR) is the subsidy on petroleum products and electricity, which would also delay the finalization of the of an agreement with the IMF for the release of the next tranche of $1 billion.
Traders and markets are looking at the IMF as progress with the Fund instills investor confidence in the economy, stabilizes Pakistan’s Foreign Exchange Reserves, and unlocks funding from other international financial institutions. Meanwhile, the analysts believe that Pakistani Rupee will bounce back if the Government lifts the subsidy on Fuel.
Furthermore, the widening trade deficit and rising import bill isn’t helping the Rupee either as it continues to put pressure on the local currency. The Government needs to take decisive economic decisions in order to control the downfall of the Pakistani Rupee against the US Dollar.
Moreover, the Liquid Foreign Exchange Reserves held by the country have also dropped to their lowest level since December 2019 as they reach $16.38 billion on 6 May 2022.
Read more: Dollar Rate in Pakistan (Daily Updates).