Should You Hold Dollars? A Personal Finance Perspective in Pakistan

In Pakistan, where the PKR has depreciated significantly against the USD over recent years, many individuals are considering holding dollars as a hedge against currency devaluation.

Holding dollars can serve as a protective measure for your purchasing power, especially during periods of high inflation or economic uncertainty. It’s particularly beneficial if you’re planning substantial future expenses tied to imports—such as education abroad, travel, or medical needs. Additionally, overseas Pakistanis remitting funds in dollars may find added value when converting at favorable exchange rates.

However, retaining excessive amounts in cash—whether in PKR or USD—can lead to wealth erosion over time. Dollar savings don’t yield returns unless invested. A balanced approach might involve diversifying into dollar-based assets, local stocks, mutual funds, or government securities like T-bills that offer income potential.

Utilizing a financial data platform in Pakistan can aid in monitoring real-time FX rates, bond yields, and economic indicators, enabling informed decision-making. Platforms offering live Pakistan interbank rates and commodity pricing data can be instrumental in this regard.

In conclusion, while holding some dollars can be a prudent strategy, diversifying your portfolio to include income-generating assets is essential for long-term financial growth.