Uh-Oh! Experts Say That The Pakistani Currency, Rupee, Might Go Down And Be Worth Less Than 300 PKR Per US Dollar Very Soon. Let's Find Out More About What's Happening.

Uh-Oh! Experts Say That The Pakistani Currency, Rupee, Might Go Down And Be Worth Less Than 300 PKR Per US Dollar Very Soon. Let's Find Out More About What's Happening.

The Pakistani currency, Rupee (PKR), might decrease in value compared to the US Dollar in the coming months. Experts predict that by the end of September 2023, it could drop to 293.52 PKR per dollar, and by June 2024, it may fall even further to around 317-340 PKR per dollar.

The Ministry of Energy in Pakistan expects the PKR to reach 325 against the USD by the end of the current fiscal year. However, Bank of America (BoFA) Securities warns that factors like debt, high inflation, and a rising central bank policy rate could contribute to a decline in the rupee's value. BoFA predicts that by June 2024, the PKR could drop as low as 340 against the dollar.

BoFA's report suggests that heavy domestic borrowing and inflation could weaken the PKR, despite it previously reaching a fair value of 286 PKR per dollar earlier this year. They estimate that the local currency may depreciate by up to 25 percent.

Inflation is expected to remain high, with an estimate of 26 percent in the financial year 2023-24. BoFA also predicts that the State Bank of Pakistan's key policy rate could increase to 25 percent this year, compared to the current level of 22 percent.

Although the firm foresees Pakistan's economy growing by 2.5 percent this year, it falls short of the government's target of 3.5 percent for the financial year 2023-24.

The report takes into account the positive impact of a new IMF lending program. However, Pakistan is facing challenges in managing its external and domestic debt. Traditional approaches to financial stability are becoming limited, and BoFA suggests the need for debt restructuring and reliance on the State Bank of Pakistan in the domestic market.

Overall, managing debt and maintaining financial stability will heavily depend on short-term political factors and economic conditions.