Islamabad, October 18, 2023: In a recent turn of events, the Pakistani rupee has witnessed a significant depreciation of 1.16% against the US dollar in the inter-bank market, with its value settling at 280.29. This abrupt shift follows a noteworthy 28-session period during which the rupee had been steadily appreciating.
— SBP (@StateBank_Pak) October 18, 2023
Analysts attribute the sudden depreciation to an increased demand for US dollars, primarily for upcoming foreign payments. This surge in demand has placed considerable downward pressure on the Pakistani rupee, raising concerns about its stability.
Shabbar Zaidi, the former chairman of the Federal Board of Revenue (FBR), has described the surge in the US dollar’s value as ‘artificial’ and has called for swift action from the relevant authorities to address this issue. Zaidi’s statement underscores the urgency of the situation and the need for measures to stabilize the currency.
While the focus of this development has primarily been on the local currency, it is essential to consider the international context. Despite robust US retail sales data, the US dollar faced challenges in making further gains. Market attention has shifted towards monitoring Chinese growth figures and the escalating violence in the Middle East.
The situation in the Middle East, including a blast at a Gaza hospital, has raised concerns about potential disruptions in oil supply. As a result, oil prices surged, underlining the interplay between geopolitical tensions and financial markets.
This recent depreciation of the Pakistani rupee serves as a stark reminder of the interconnectedness of global financial markets and the need for vigilance in the face of changing economic dynamics. As the situation unfolds, it will be crucial to monitor how authorities respond to the call for action and how international factors continue to influence the currency’s performance. Stay tuned for further updates on this developing story.