Today Dollar Rate in Pakistan – Dollar to PKR

The dollar is the currency of the United States of America USA. The dollar is the world powerful currency. Most Countries trade in the Dollar currency whether it is import or export.

Pakistan also trades all its imports and export in Dollar Currency. Due to some financial crisis and political instability Dollar is increasing rapidly in the last few days.

Why PKR Value is Decreasing 

Currently, the PKR value is decreasing day by day to Dollar. The unstable political situation, Federal Govt put a ban on import of the goods. Banks are not allowed to open Letters of Credit ( LC) to traders. Foreign investors withdraw their investments and there is no new investment from foreign traders. Overseas Pakistanis are also not doing remittances and there is no incoming Dollar to the Country. On the other hand, people are preferring to buy gold and dollar instead of plots.

The current Government put a cap on Dollar in the interbank, and there is no inflow of the Dollar which also effect and demand the Dollar raised. People start to buy dollars in the black market.

International Monetary Fund IMF also holds its loan amount to Pakistan due to the forcefully controlling the Dollar. Their condition was to set free the Dollar and there should be no cap on the rate from Government. But Government forcibly put control but it all went to no use as the Dollar rate increased day by day and traders start to buy dollars through Havala Hundi.

Some experts say that the fall down of rupees will continue between 250-270 until 30 June 2023. Others also said that might be this fall will continue until December 2023.

Overseas Pakistanis also reduce their remittances as it also affects the Dollar rate. Now as it is expected that IMF will release its loan amount to Pakistan in February 2023, however still take time to gain PKR value.

Other Factors for Decline in Pakistan Currency 

The amount of GDP is also a factor that can be used to measure the value of the currency. Pakistan’s GDP is lower than the USA’s GDP rate; this also makes a difference in the rate and value of the currency. 

Investors and entrepreneurs also play an important role in the economy and exchange rate. When foreign investors invest in the country it boosts the economy and strengthens the currency. Due to the critical political situation in Pakistan, foreign investors and local entrepreneurs are afraid to invest and start businesses.

Banks are not opening the Letters of Credit, and a huge number of commodities are held at Karachi port. This factor also increases inflation and causes of weakness in the Currency. 

Ukraine and Russian war also have a great impact on the US Dollar. Due to this war inflation rate increased in the whole World and International Banks and Financial institutions increase their interest rate. Pakistan mostly borrows loans from foreign banks, due to the rise in interest rates it is difficult for Pakistan Govt to get a loan with huge interest as it affects the Country’s reserves. 

The IMF delegation will start its review on 31 January and the table talk will continue until 9 February 2023. It is most likely expected that IMF will release its bailout which will be helpful to Pakistan and its sinking currency against USD and other foreign currencies. But at the same time, Pakistan needs political stability and long-term policies for its economic and agricultural growth.