Rupee Drops Below 300 Against US Dollar for the First Time in Pakistan’s History [Updated]

The Pakistani rupee nosedived below 300 against the US Dollar during intraday trade today after breaching below 299 at 10:00 AM as political turmoil and economic uncertainty haunt markets.

The Pakistani rupee fell during the first 30 minutes of intraday trade today with the interbank rate losing ~50 paisas to fall as low as 300.25 before 10:15 AM, down by 0.2 percent from Wednesday’s close. Open market rates across multiple currency counters are yet to report changes from yesterday’s 307-312 after initial asks for the greenback opened at 308.

The PKC or over-the-counter rate offered by banks to the general public surged by 0.1 percent to 300.6.

At close, the PKR depreciated by 0.2 percent to close at 300.22 after losing 59 paisas against the dollar today.

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At 10:05 AM, the interbank rate clocked in at 300.25 before heading for more losses as it continues to play with 300 as per analyst warnings reported this week.

Sellers have started hoarding the greenback at major cash counters in the country as the outlook on the top foreign currency remains in the dark.

Meanwhile, the black market rate has also widened against the Bank rate and trades in the 312-318 band, maintaining a gap of up to Rs. 15 due to this week’s horrid plunge.

A trader said the exchange rate is moving in the low-to-negative range since the caretaker setup took oath as harder-than-expected Pakistani inflation forecasts and short-term estimates on trade deficit pointed to an aggravating economic slowdown in the coming months. The mixed stock market data was also weighed. “The PKR crash, which follows disappointing CAD data from last week, has raised more doubts over a rebound in exchange rate sentiments, and soured participation in money markets,” he added.

Meanwhile, on Wednesday, the State Bank of Pakistan (SBP) Deputy Governor Dr. Inayat Hussain told the Senate Committee on Finance and Revenue that rising demand for dollars from the public and the lifting of import restrictions are the primary drivers of the depreciating rupee.

Overall, the rupee is down nearly Rs. 82 since January 2023. Since April 2022, it is down over Rs. 129 against the greenback. As per exchange rate movements witnessed so far today, the PKR has lost nearly 50 paisas against the dollar.

Economic Analyst A H H Soomro told ProPakistani,

The psychological barriers are now behind us as the government has taken a back seat in controlling the exchange rate for political reasons. There is growing pent-up demand in the economy for pending LCs and imports which are inelastic in nature. Until remittances and exports improve, pressure will be exhibited by speculators as well.

Since 2018, the rupee has lost over Rs. 196 after factoring in today’s crash. The USD/PKR exchange rate has shifted above all moving averages since April 2022 and is likely to continue falling as trends look set for lows below 300 in the days to come.