Pakistan has been facing severe economic challenges in recent years, with the country on the brink of default due to the worst economic conditions it has ever experienced. The situation has been worsened by a range of factors, including a high fiscal deficit, a massive trade imbalance, and a rapidly devaluing currency.
The government has been struggling to revive the economy due to its own political disparities, no improvement can be seen. The nation still remains in a state of economic turmoil, with many businesses and individuals struggling to make ends meet. The situation has led to widespread concern and uncertainty, with many fearing that the worst is yet to come which is a complete default.
The Pakistan rupee has now hit an all-time low. The currency had already been crashing slowly and gradually but now it has doomed. The PKR is now standing below 300 against the USD. Despite this, the political parties are busy fighting over power while the nation is literally burning down to the ground.
During the early hours of intraday trade today, the Pakistani rupee experienced a sharp decline, with the interbank rate dropping by Rs. 10 to reach a low of 300.25 by 1:30 PM, representing a 3.3% decrease. The open market rates at various currency counters also reached highs of 310-315 after initial offers for the US dollar started at 306. Furthermore, sellers have been hesitant to trade the greenback due to the uncertain outlook for the top foreign currency.
As a result of all of this, US Dollars are currently not available in the open market.
Sources have revealed that the Pakistani currency is in sync with the current political turmoil that has taken hold of the local markets. The situation has worsened since the arrest of former Prime Minister Imran Khan on Tuesday by paramilitary forces at Islamabad High Court. The black market rate has moved closer to the bank rate and is trading within the 310-320 band.
Currency dealers have predicted a further decline in the rupee with nationwide protests and state interference continuing to erode investor confidence. In addition, disappointing inflation forecasts and mixed stock market data have contributed to the worsening economic slowdown, leading to a low-to-negative range in the exchange rate. The PKR collapse has raised doubts about the exchange rate’s rebound and soured participation in money markets.
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