In line with expectations, the significant drop in inflows of worker remittances pulled Pakistani currency down by 0.31%, or Rs0.89, to a nine-day low at Rs288.49 against the US dollar in the inter-bank market on Friday. Besides, a small dip in the country’s foreign exchange reserves, held by the State Bank of Pakistan (SBP), also put a dampener on the rupee. According to State Bank’s data, the inflow of worker remittances slumped 19% to a five-month low at $2 billion in July compared to $2.51 billion in the same month of last year. The significant slowdown in remittances has apparently reduced the supply of foreign currencies to the inter-bank market, piling pressure on the rupee. The lack of foreign currency also leads to increased borrowing, though the foreign debt has already ballooned to unsustainable levels.

Source: The Express Tribune August 12, 2023 14:50 UTC