KARACHI: Today, the Pakistani rupee had a bit of a rollercoaster ride against the US Dollar. It started at 304 in the interbank market and dropped to 307.925 at noon, losing around Rs. 4 compared to the morning.
However, it later recovered to around 305 between 1:30 PM and 2:30 PM and remained relatively stable for the rest of the day.
Since the caretaker government took charge, the US Dollar has gained Rs. 16.02 against the Pakistani Rupee. In the open market, exchange rates ranged from 308 to 314.
By the end of the day, the Pakistani Rupee slightly improved, gaining seven paisas against the US Dollar to close at 305.47. In the black market, the exchange rate was even higher, trading in the 325-331 range. Currency dealers expect the rupee to stabilize once it finds a comfortable level to resist further depreciation, but September may still see record lows between 310-320, following the trend from August, unless economic conditions improve.
It’s worth noting that the Pakistani Rupee has lost nearly Rs. 85 in value since January 2023 and over Rs. 132 since April 2022 compared to the US Dollar. Today, it gained seven paisas against the dollar.
The rapid decline in the value of the Pakistani Rupee in 2023 is attributed to a combination of factors, including premature relaxation of imports, weakened exports, and the diversion of home remittances to informal channels like hawala. This has increased the demand for US dollars among smugglers and under-invoiced traders.
The Pakistan Business Council has described this exchange rate drop as a significant challenge for Pakistan’s economy. Some traders have also mentioned that the central bank’s weekly withdrawals from its reserves indicate a decrease in the documented dollar volume, as people are turning to informal channels like hawala for better returns. The gap between the official and black market rates has widened by Rs. 26, contrary to the regulator’s efforts to align the rupee/dollar rates across all channels.
In the interbank market today, the Pakistani Rupee actually gained ground against most other major currencies. It appreciated by one paisa against the Australian Dollar, one paisa against the Saudi Riyal, two paisas against the UAE Dirham, 54 paisas against the British Pound, and Rs. 1.17 against the Euro.