Asia’s Worst Performing Currency: PKR-USD
The Pakistani rupee (PKR) has been Asia’s worst performing currency in 2020, and it looks like 2021 and 2022 will be no different. The currency has been in a downward spiral since the start of the year, and it has been hit hard by the coronavirus pandemic. The PKR-USD exchange rate has dropped from around Rs. 160 to Rs. 175 in the past year, and it is expected to continue to decline in the coming months.
Factors Affecting the PKR-USD Exchange Rate
The PKR-USD exchange rate is affected by a number of factors, including the country’s economic and political situation, as well as global economic trends. The Pakistani economy has been struggling for years, and the pandemic has only exacerbated the situation. The country’s GDP growth rate has been negative for the past two years, and the unemployment rate is at an all-time high.
The political situation in Pakistan is also a major factor in the PKR-USD exchange rate. The country has been in a state of political turmoil since the 2018 general election, and the current government has been unable to address the country’s economic woes. This has led to a lack of investor confidence, which has further weakened the currency.
The global economic situation is also having an impact on the PKR-USD exchange rate. The US dollar has been strengthening against most major currencies, and this has put pressure on the Pakistani rupee. The US dollar is seen as a safe haven currency, and investors are turning to it in times of uncertainty.
Impact of the PKR-USD Exchange Rate on the Economy
The PKR-USD exchange rate has a significant impact on the Pakistani economy. A weaker currency makes imports more expensive, which can lead to higher inflation. This can have a negative effect on the country’s economic growth, as it reduces consumer spending and investment.
The PKR-USD exchange rate also affects the country’s balance of payments. A weaker currency makes it more difficult for the country to pay its foreign debt, as it has to pay more in foreign currency. This can lead to a further weakening of the currency, as investors become less willing to invest in the country.
Government Measures to Stabilize the PKR-USD Exchange Rate
The Pakistani government has taken a number of measures to try and stabilize the PKR-USD exchange rate. The government has increased interest rates, which has helped to attract foreign investment. The government has also implemented a number of fiscal measures, such as tax cuts and subsidies, to try and stimulate the economy.
The government has also taken steps to reduce the country’s reliance on imports. It has implemented a number of measures to encourage domestic production, such as tax incentives and subsidies. This has helped to reduce the country’s reliance on imports, which has helped to reduce the pressure on the PKR-USD exchange rate.
Outlook for the PKR-USD Exchange Rate
The outlook for the PKR-USD exchange rate is uncertain. The currency is expected to remain weak in the short term, as the country’s economic and political situation remains uncertain. However, if the government is able to implement the necessary reforms and stimulate the economy, the currency could start to recover in the long term.
The PKR-USD exchange rate is likely to remain volatile in the coming months, as the country’s economic and political situation remains uncertain. Investors will be closely watching the situation, and any positive developments could lead to an improvement in the currency’s value. In the meantime, the Pakistani government will need to continue to take measures to stabilize the currency and attract foreign investment.