The Pakistani rupee has failed to hold its ground against the US dollar as the local unit declined by 40 paisas in the interbank trading on Friday. As per the data provided by money dealers, the Pakistani rupee failed to gain market confidence and slumped during the early trading session today. The US dollar surged to Rs288, gaining 40 paisas in its value. Yesterday, the local currency shed 14 paisas in its value against the greenback which settled the trade at Rs287.46. On the other hand, the trend in the stock market remained bullish with the benchmark KSE-100 Index achieving nearly 1,100 points by 10:40 am today. The volatility in the market could be attributed to political uncertainty as no decision has so far been made with regard to the interim setup.

Pakistan is facing a deep economic crisis with falling foreign exchange reserves. The reserves plummeted to $13.34 billion, registering a $124 million decline, for the week ending on August 4, 2023, as reported by the State Bank of Pakistan on Thursday. Apart from this, the inflow of dollars in the shape of remittances has also registered a 19.3% decline during the first month of the new financial year. According to the SBP, the country received workers’ remittances amounting to $ 2.027 billion in July 2023 compared to $ 2.511 billion in July 2022, showing a drop of $ 484 million. The decline in forex reserves has raised concerns about Pakistan’s capacity to handle its imports, hence less confidence in the stability of the local unit in the international currency market.

Credit: Independent News Pakistan (INP)