Will Dollar Rate Decrease: The Pakistani Rupee is being traded at the lowest against Dollar after it has been subjected to worst weekly decline since 1988. The main reasons accounting to this are the shortage of Foreign Reserves, unstable political atmosphere and the sluggish growth of economy. Finch- a rating agency has downgraded the country’s credit rating from Stable to Negative and have maintained the (LFTC) rating at “B”. This, along with the country’s crumpling Stock Market has put an additional pressure on the currency.
Since January, the foreign reserves of Pakistan have been diminishing due to many rationales including widening current account surplus, the need to service external debts and absence foreign investment. Since the start of the Fiscal year 2023, the rupee has almost lost 24% of its original value against the dollar and has made things difficult for currencies in emerging nations.
Why does the USD/PKR exchange rate fluctuate?
The USD/PKR pair represents that how much rupees are required to buy one dollar. On July 26, the exchange rate between rupees and dollars reached a record high of 233.38. A currency value is determined by the Economic growth of the country that issues it along with monetary policy factors like balance of international commerce and interest rates of the country.
Pakistan’s economy is centered on consumer spending and its manufacturing sectors depend on the trade of plastic, steel, chemicals for product manufacturing. During the post-pandemic recovery process the country’s imports sky rocketed to 24% widening the trade balance to 55.7% in terms of dollar. Due to this the demand for dollar increased and it weakened the Rupee’s value.
USD/PKR Forecast: What will happen to dollar rate in coming days?
Finch Solution experts predicts that SBP will continue to increase the interest rates as it will lower the demand of imported products and will also slow down the diminishing Foreign reserves of the country.
- Trading Economics forecasts the dollar to reach 230.71 by the end of the quarter and the rupee will continue to be weaken to reach 239.06 in 12 months time.
- Wallets Investor predicts dollar to be trading at 88 by the year 2022 and to reach 241.93 by the end of 2023. They also forecast the dollar for the year 2025 showing it to reach 264.14.
- Economic Forecast Agency forecasts the dollar to be trading at 259.8 at the end of 2022 and at 294.4 by the end of year 2025 and will eventually cross the 300 mark barrier The forecast for the year 2030 is yet to be analyze..
It’s crucial to keep in mind that currency markets are incredibly unpredictable which makes the prediction to be highly difficult and accurate.
Conclusion of Will Dollar Rate Decrease
According to the global reports issued it seems very difficult for rupee to gain its value in comparison to dollar. The rupee cannot be strengthened until there is political stability within the country. Hence the dollar rate will continue to rise unless the problems are solved and General Elections are held.