The devaluation of the rupee accelerated in the second half of 2021, with the USD/PKR exchange rate breaching the 200 level for the first time in May, ending the year at 176.20. By the end of 2020, the rupee was trading at 160, with the Covid-19 pandemic driving up the value of the dollar. It weakened over the summer to a record above 163, ending the year around 155. The country has faced ballooning current and fiscal account deficits and repeated devaluations of the currency, which shifted from a managed rate against the US dollar to a free-floating exchange rate in 2018.īy the start of 2019, the US dollar/Pakistani rupee rate was trading around 140.
The rupee has been in a long-term decline against the dollar since the start of 2018 when it traded around the 110 level.
#Pakistani rupee to us dollar driver#
Monetary policy on using higher interest rates to combat soaring inflation has also been a key driver for the dollar, with a series of interest rate hikes making the dollar more attractive for investors. The dollar acts as a safe haven for investors during times of economic and geopolitical uncertainty, which has been evident in 2022 as the greenback has soared in value to 20-year highs against a basket of other currencies. Meanwhile, imports decreased by 22.6% during the period.Īs the world’s reserve currency, the value of the USD is driven by sentiment on the global economy as well as economic activity in the US. In December 2021, the deficit was at $4.816bn.Īccording to PBS data, the exports during July-December 2022/23 were recorded at $14.249 bn against the exports of $15.125bn in July-December of 2021-22, a decline of 5.79%. Pakistan’s trade deficit narrowed by 32.65% t to $17.133bn during the first half (July-December) of the current fiscal year, data released by the Pakistan Bureau of Statistics (PBS) showed. The country’s imports have soared in the post-pandemic recovery. Pakistan is a consumption-based economy, relying on imports of commodities such as plastic, steel and chemicals for its manufacturing industry. These all determine the country’s attractiveness as an investment destination and the potential for the national currency to rise in value. The value of a currency tends to be driven by the issuing nation’s economic growth, monetary policy (such as interest rates), and cross-border trade balance. The number of rupees needed to buy one dollar reached a record high of 240.15 on 28 July. In forex trading, the US dollar to Pakistan rupee (USD/PKR) currency pair represents how much of the quote currency – the rupee – is needed to buy one unit of the base currency – the US dollar. What drives the value of currencies, and what is the outlook for the rupee? In this article, we look at the performance of the Pakistani rupee against the US dollar, as well as the latest USD/PKR prediction and forecasts. The rupee had seen a rebound in October 2022 but has since been in a downward trend as political turmoil, a fall in the country’s foreign exchange reserves and a rising risk of a debt default weigh on its value. The USD was up 17% aganist the PKR in July. The Pakistani rupee (PKR) has continued to struggle against the US dollar (USD) since 2022 as the rupee crumpled against the US dollar in July 2022, as the greenback reached an all-time high in the interbank foreign exchange market. The currency hit a record low of around 280 in late January 2023. The PKR remains down by around 24% since the year-to-date ( YTD), and 55% down since this time last year. The start of 2023 has been far from pleasant for the Pakistani rupee ( PKR), which fell 9.6% aganist the US dollar (USD) on 26 January, this was the biggest one-day drop in over two decades, a slump which convinced the International Monetary Fund to resume its lending to the country. – Photo: Bloomberg Creative Photos / Gettyimages The Pakistani rupee rebounded against the US dollar in October.
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