August 24, 2023 (MLN): The Pakistani rupee (PKR) plunges below the psychological level of 300 against US Dollar in the interbank market during intraday trade.
The local unit was quoted at PKR 300.03/300.28 [01:21 pm PST] with the trades being reported at 300.26 per USD while in the open market, PKR is being traded at 314/316 per USD.
This takes the gap between the interbank and open market rate to 4.58%, and has exceeded the recommended 1.25% threshold set by the International Monetary Fund (IMF) for the last 14 consecutive days.
During the current financial year, PKR has depreciated against the Dollar by 14.76 rupees or 4.92%. While the current calendar year has seen PKR depreciate by 73.86 rupees or 24.6%.
One significant factor weighing down the Rupee is the International Monetary Fund (IMF)’s condition for a more market-determined exchange rate to secure financial aid.
This has limited the government's ability to control the rupee through trade restrictions.
As a result, import restrictions have been lifted, leading to an increased demand for dollars and subsequently weakening the rupee.
High demand for the dollar, a 30% MoM increase in imports in July, and many individuals being heavily invested in dollars are putting pressure on the rupee’s value.
Additionally, Pakistan's dependence on imported oil exposes the country to the constant rise of international oil prices in the past few weeks, which also affects PKR.
