Accessibility links

Breaking News

Pakistani Rupee Falls To Record Low Against Dollar, Stoking Inflation Fears

A Pakistani money changer counts U.S. dollar bills in Islamabad. (file photo)
A Pakistani money changer counts U.S. dollar bills in Islamabad. (file photo)

The Pakistani rupee slumped to record lows against the dollar on July 19 as domestic political and economic factors weigh on the currency.

The rupee fell to 224 against the U.S. currency on the interbank market during the day, after closing on July 18 at 215.2.

The rupee's current downturn was sparked by domestic political instability, and the pace of its decline increased with the results of by-elections in Punjab Province, where the opposition Pakistan Tehrik-e Insaf party of former premier Imran Khan unexpectedly won 15 out of 20 seats, thus paving way for a change of government in the key province.

Khan's victory has breathed new life into his campaign to oust the current government, with the former cricket star once again repeating his demand for early elections after he was sacked in a no-confidence vote. The ruling Pakistan Muslim League says the existing assembly will complete its constitutional term of five years before a vote is held on time in mid-2023.

Zalakat Khan, who teaches at the Economic Department of Peshawar University, said the current situation with the rupee will spark another wave of inflation in Pakistan, with food and utility prices hitting workers hard.

Some relief for the battered currency is on the way, however, after the International Monetary Fund (IMF) agreed to a deal that will see Pakistan receive $1.7 billion in tranches in the coming weeks to shore up the country's finances.

RFE/RL has been declared an "undesirable organization" by the Russian government.

If you are in Russia or the Russia-controlled parts of Ukraine and hold a Russian passport or are a stateless person residing permanently in Russia or the Russia-controlled parts of Ukraine, please note that you could face fines or imprisonment for sharing, liking, commenting on, or saving our content, or for contacting us.

To find out more, click here.