Today, the PKR-US$ exchange rate in the interbank market has depreciated by 3.1 percent from Rs 104.90 per US$ yesterday to Rs 108.25 per US$.
The Pakistani rupee has sunk to its three and a half year low today owing to the political instability and concerns over foreign exchange reserves.
In an official statement, State Bank of Pakistan (SBP) stated; “While almost all macroeconomic indicators have been showing an encouraging picture, such as decade-high real GDP growth, an increase in investment, credit expansion to the private sector, and subdued inflation; the deficit in the external account has been rising for some time.”
State Bank seems optimistic about the future saying, “this depreciation in the exchange rate will address the emerging imbalance in the external account and strengthen the growth prospects of the country.”
State Bank also believes that the current exchange rate is broadly aligned with the economic fundamentals. SBP will continue to closely monitor the developments in the foreign exchange markets and stands ready to ensure stability in the financial markets.
Looking at the current situation, Finance Minister Ishaq Dar has called a meeting of banks’ officials on Thursday. Pakistan has been swimming in massive debt for quite some time, coupled with weak external accounts a financial crisis is not something that we can be surprised about.
It is yet to be seen whether the government will keep its “All is Well” approach or we’ll finally learn the truth about our collapsing economy.