USD/PKR trend

The Pakistani Rupee continues to hit new lows, weakening by 3.4% in March 2022 alone, driven by:

• Political uncertainty and noise.

• Month-to-date outflow of $380 million from SCRA.

• Geopolitical risks and rising global commodity prices.

• A widening current account deficit (CAD) and falling foreign exchange reserves.

Historical Trend of USD/PKR – Current Fiscal Year

The PKR has faced significant volatility this fiscal year due to a combination of global and domestic pressures:

• Jul–Sep 2021: Rising oil prices increased dollar demand, pushing the PKR downward.

• Nov 2021: Saudi financial support provided short-term relief before the downward trend resumed.

• Late 2021 – Early 2022: Import payments and external repayments by the State Bank of Pakistan added more pressure.

• Feb–Mar 2022: The Russia–Ukraine conflict, commodity price spikes, and domestic political instability accelerated the decline.

By March 2022, the exchange rate reached 183.47 PKR per USD, marking a sharp drop from mid-2021 levels.

Economic Concerns at Boiling Point

With inflation, shrinking reserves, a large CAD, fiscal deficit, and revenue challenges mounting, the situation risks becoming unmanageable without decisive government action.

A senior Tresmark analyst suggests the government should have issued more Eurobonds and aggressively expanded yuan swap lines with China to stabilize the economy.

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