On Monday, the Pakistani rupee dropped sharply to a record low of over Rs211 against the US dollar in the interbank market, indicating that the currency remains highly volatile.

The rupee’s latest devaluation against the US dollar is the result of panic buying by traders in response to reports that some financial institutions were out of foreign currency.

According to the State Bank of Pakistan (SBP), the US dollar was available at Rs211.21 at 11:03 AM and had closed at Rs208.75 on Friday.


It is worth noting that the Pakistani rupee has fallen for the seventh working day in a row, losing nearly Rs6, or more than 3 per cent, to date.

Experts predict that the Pakistan rupee will continue to fall against the US dollar and other major currencies owing to concerns regarding the IMF’s $6 billion program’s restoration, the country’s expanding current account deficit, and dwindling foreign exchange reserves.

The PKR which lost 32.5 per cent of its value in the current financial year 2021-22 is forecasted to remain under stress as the dollar is in high demand in the market due to economic crises.

SBP appears helpless to stem the rupee’s speculative fall, as demand for the US dollar continues to rise due to quarter-end payment strain.

Monetary specialists attribute the depreciation of the local currency to a widening trade deficit, political instability, and a drop in foreign direct investment. The currency expert believes that the positive news from the Financial Action Task Force (FATF) will help attract foreign investment, increasing the availability of the dollar.

Traders expect the rupee to settle in a range of 195-200 per dollar until the end of the current fiscal year 2021-22 if the IMF deal is finalised.

According to data compiled by Ismail Iqbal Securities, Pakistan’s currency has depreciated by 14.57 per cent against the dollar this year, making it one of the worst performers in the world.

The worst-performing currency was the Sri Lankan rupee, which fell 43.9 per cent, followed by the Laotian Kip, which fell 24 per cent, the Turkish Lira, which fell 23.18 per cent, and the Ghana Cedi, which fell 22.33 per cent, according to the data.