On Wednesday, the Pakistani rupee depreciated by 10 paise to close at Rs.128.10 per US dollar from Rs.128.40 per US dollar the previous day. This is the ninth consecutive session during which the Pakistani rupee has depreciated against the US dollar.
The slide in the Pakistani rupee has been attributed to factors such as weak global demand and volatility in equity markets, as well as political instability in Pakistan. The Pakistani rupee has also been impacted by a slowdown in economic growth in India, which is Pakistan’s major trading partner.
According to data released by the State Bank of Pakistan (SBP), foreign currency reserves have declined steadily since March 2016, when they stood at $31.8 billion. In February 2018, foreign currency reserves stood at $25.8 billion, a decrease of $5.2 billion over the previous month.
Pakistan’s foreign currency reserves are now below their minimum requirement of $30 billion set by the International Monetary Fund (IMF). The SBP has asked for foreign loans from China and Saudi Arabia to shore up its foreign currency reserves.
The Pakistani Rupee vs the Indian Rupee
Pakistan’s economy is mainly reliant on agriculture and remittances from its diaspora in India. The rupee has depreciated by almost 9% against the Indian rupee this year, making it increasingly difficult for Pakistanis to purchase goods and services in India.
The Pakistani rupee has lost about 37% of its value against the US dollar since January 2017, making imported goods more expensive. In addition, Pakistan depends heavily on foreign aid and remittances from its diaspora, which makes it vulnerable to external shocks.
Pakistan’s Economic Situation
Pakistan’s rupee has depreciated for the ninth consecutive session and is now worth less than one and a half US dollars. The depreciation of the rupee has led to increased prices of imported goods and decreased exports. This has had a negative impact on the country’s economy, which is already struggling with high levels of inflation and unemployment.
The Pakistani rupee has been weakening since early November, when it hit a record low of 108.6 to the US dollar. Since then, the rupee has depreciated by about 8% against the US dollar, reaching a value of 97.5 on January 26th. This decline has had a significant impact on Pakistan’s economy, as imports become more expensive and exports become less profitable. Prices of imported goods have risen by about 20%, while those of exported goods have decreased by about 30%.
The depreciation of the rupee is likely to continue due to several factors. First, there is increasing international demand for Pakistan’s natural resources, such as coal and gas, which raises the value of the Pakistani currency relative to other currencies. Second, Pakistan’s economy is already weak and is likely to get worse in the near future due to high levels of inflation and unemployment
Theories on why the Pakistani Rupee is depreciating
There are many theories as to why the Pakistani rupee is depreciating. Some suggest that the depreciation is a result of instability in the region, while others claim that it’s due to economic problems at home. Regardless of the reason, it’s clear that things are not going well for the Pakistani currency right now.
What Happens to the Pakistani Rupee Next?
The Pakistani rupee has been depreciating for the ninth straight session against the US dollar. The currency is currently trading at Rs124.5 to the dollar. What will happen to the Pakistani rupee next?
There are a few factors that could cause the Pakistani rupee to continue declining. Firstly, Pakistan’s external debt is increasing, which means that there is a higher demand for foreign currency. Secondly, there is a glut of currency in the country, which means that there is too much money available and this makes it more difficult for the rupee to maintain its value. Finally, there are concerns about Pakistan’s economy, which could lead to more inflation and higher interest rates.
Conclusion
Looking at the latest currency exchange rates, it seems that the Pakistani rupee is continuing to depreciate against major world currencies. The rupee has depreciated by around 7% against the US dollar this year and by over 10% against the euro. Meanwhile, the Chinese renminbi continues to rise in value, making it more expensive for Pakistanis to purchase goods from China.
