Pakistani Rupee Drops To Record Low Of $300 As Military Attempts To Calm Unrest

The military intervened to quell violent protests that broke out after Imran Khan, the previous PM of Pakistan, was detained this week, and the Pakistani rupee plunged to a new record low.

The foreign-exchange department of Arif Habib Ltd. said that on Thursday, the rupee fell 3.3% to a record low of 300 to the dollar.

On Thursday, the price of dollar due in 2031 increased from its lowest point since November to 33.44 cents per dollar.

The disturbance occurs as the government bargains with the IMF to resume the $6.5 billion bailout program it needs to continue operating to avoid default.

On May 11, Khan was brought before Pakistan’s Supreme Court after the court had instructed its anti-corruption watchdog to do so.

After an appeals court on Wednesday sentenced the 70-year-old lawmaker to be held in the anti-graft agency’s custody for eight days, the Pakistani government requested military assistance to end violent protests.

His arrest happened on Tuesday. The disturbance occurs as the government bargains with the IMF to resume the $6.5 billion bailout program it needs to continue operating to avoid default.

The nation’s financial markets have been rocked by this worrying event, which has prompted worries about the resilience of the country’s economy.

The rupee’s decline in value against the dollar has negative effects on Pakistan’s commerce, inflation, and people’s purchasing power.

Depreciation of the Pakistani rupee and Economic Difficulties
The significant decrease in the Pakistani rupee’s value is a result of the nation’s growing economic problems.

This scenario has been exacerbated by a wide range of reasons, including an expanding trade deficit, constrained reserves of foreign currencies, rising inflation, and a decline in foreign investment.

In recent months, the economy of Pakistan has been in disarray in addition to the ongoing political turbulence.

Inflationary trends and outside balance of payment pressures are plaguing Pakistan’s economy, which is mostly caused by unfavorable internal and global events.

As a result of rising food costs, Pakistan’s inflation rate increased to a record 36.4% in April, which is the highest in South Asia, from 35.4% in March.

This frightening decline has alarmed both citizens and officials, sending shockwaves across the financial markets.

The causes of the rupee’s decline, its probable effects on the economy of Pakistan, and the likely responses from the government.

Islamabad has taken steps to attempt to obtain the funding, including abolishing exchange rate controls, which have caused the currency to depreciate, raising taxes, and eliminating subsidies.
Repo rates have been increased by the central bank to an all-time high of 21%.

From almost $17 billion a year ago, the company’s net liquid currency reserves had decreased to $10.04 billion.

Conclusion
The difficulties Pakistan’s economy is facing are highlighted by the depreciation of the Pakistani Rupee to a new unparalleled low of 300 against the US dollar.

It is necessary to take an integrated strategy that includes structural reforms, fiscal restraint, and monetary measures to address the core causes of the decline.

While currency stabilization is important, long-term remedies should concentrate on increasing exports, lowering reliance on imports, and enhancing overall economic resilience.

Pak may work to create stability and long-term expansion for its national currency and its economy as a whole through coordinated efforts and effective policies.

The country’s economy faces a major problem due to the historic low of 300 for the Pakistani rupee against the US dollar.

To rebuild trust, stabilize the currency, and solve the underlying economic problems, the government must act quickly.

To lessen the negative impacts and guide the nation toward stable and sustainable economic growth, officials, corporations, and citizens must work together.

Proofread & Published By Naveenika Chauhan