Pakistan’s rupee, after plunging to Rs308 per dollar, in the open market, has become the weakest currency in the South Asia.
According to the Exchange Companies Association of Pakistan, the Pakistani rupee on Tuesday plunged to a new record low of Rs308 against the US dollar on the open market, down 1%, or Rs3, from the previous day’s closing.
As a result, the difference in currency rates between open and interbank markets grew to a historic high of Rs21.
The Pakistani rupee has reached the weakest level in South Asia as the cheapest currency, Sri Lankan, beats the Pakistani rupee. One US dollar 304 Sri Lankan rupees and 305 Pakistani rupees.
The local currency rupee became the weakest currency in South Asia from the strongest currency of the 90s.
After the agreement with the IMF, the Sri Lankan rupee has improved, while the Pakistani rupee is also likely to improve.
Other south Asian countries in India have a dollar of 83 Indian rupees, 87 Afghanis in Afghanistan, 107 takas in Bangladesh, 132 Nepali rupees in Nepal and one dollar in Bhutan 82 Bhutanese fingers.
The rupee dipped for the fifth straight working day in interbank transactions, falling 0.21%, or Rs0.59, to a 12-day low of Rs287.15 versus the US dollar.
The expanding discrepancy between the supply and demand of the US dollar in the currency market was putting increased pressure on the rupee, according to market discussion.
Pakistan’s foreign exchange reserves, which are currently at a dangerously low level of $4.3 billion, have been steadily declining while a disproportionately large quantity of foreign currency is needed to cover import costs and pay off foreign debt.
By the end of June 2023, Pakistan must repay $3.7 billion in foreign debt. Additionally, it requires an additional $3.7 billion each month to guarantee the smooth import of necessities.
Currency traders in the open market disclosed that commercial banks were buying dollars in the market to settle the cross-border payments made by their clients using credit cards.