Pakistani Rupee Hits Three-Month Low Against US Dollar as Caretaker Government Takes Over

The Pakistani rupee (PKR) experienced a significant decline, reaching a three-month low of 292 PKR against the US dollar on Tuesday, coinciding with the transition to a caretaker government at the central level. The local currency lost 3 PKR against the greenback in the interbank market, aligning with market expectations of a new round of depreciation.

The PKR/USD exchange rate had been relatively stable at around Rs288 over the previous three months. Currency devaluation fears surfaced after the country won a $3 billion loan programme from the International Monetary Fund (IMF) in late June.

Notably, in its final two months in office, the PDM coalition government did not initiate devaluation, instead leaving that responsibility to the caretaker administration. The government decided to relax all import restrictions in an effort to manage the country's dwindling foreign exchange reserves, and subsequent market research suggests that this action may weaken the rupee.

The PKR briefly strengthened against the US dollar after the IMF accord and inflows from friendly nations, but it has since retreated to the 285-290 PKR per dollar range it was trading at before the deal. Rupee depreciation occurred despite the fact that foreign exchange reserves of the State Bank of Pakistan increased in a month.

With import limits loosened, more dollars are in demand, which might put more strain on the domestic currency. This change illustrates the intricate relationship between economic policy, international financial markets, and the stability of Pakistan's currency.

For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true and top stories of the world.