Pakistani Rupee to hit Rs 350 mark against US Dollar: International Agency Report
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The Pakistani rupee (PKR) is poised to conclude the year as Asia’s weakest currency, and projections suggest ongoing depreciation in 2024, with BMI Research anticipating a drop to 350 PKR per USD by the end of the following year.
Throughout the year, the currency has experienced a substantial decline of 20.73 percent or 59.21 rupees against the US Dollar, and analysts predict persistent challenges ahead, as reported by Bloomberg.
John Ashbourne, a global economist at BMI in London, a Fitch Solutions company, commented on the situation, stating, “This looks like a currency that is set to adjust downwards,” citing factors such as Pakistan’s high inflation and trade deficit exerting pressure on the rupee.
The weight on the rupee is further exacerbated by Pakistan's high debt payments and an external funding gap. The country faced the risk of default this year, and reduced foreign investments, coupled with Asia’s rapid inflation, are contributing to its economic difficulties, as noted by Bloomberg.
Despite the International Monetary Fund's recent approval of a $700 million payout, providing temporary relief from default, concerns persist that challenges may extend into 2024, necessitating additional aid for Pakistan's fragile economy.
The looming threat of a dollar shortage could result in the resurgence of parallel currency markets, which emerged last year when the central bank restricted access to foreign currency in a bid to safeguard dwindling reserves.
In September, as the rupee reached a historic low, the government intensified efforts to curb illegal buying and selling of the dollar at a premium to the official exchange rate, but the subsequent gains appear to be short-lived.
