Despite ongoing talks between Islamabad and the International Monetary Fund (IMF) to recommence the USD 6 billion rescue package from the IMF, Pakistan is on the edge of bankruptcy as the country’s economic status is facing a dismal future with no immediate bright outlook.
As of June 21, the Pakistani Rupee (PKR) had crossed the 212 USD mark. Pakistan, on the other hand, has fewer than six weeks’ worth of import coverage and its foreign exchange reserves have reached a critical level.
Over the past year, the value of the Pakistani rupee has plummeted by a staggering 34% (or PKR 53.67). In June of previous year, it ended at PKR 157.54. With a decline of around 16.5 percent (since December 31, 2001) against the US Dollar, the Pakistani Rupee has thus become Asia’s “worst-performing currency in 2022,” ranking last among a group of 13 peers that also includes the Japanese Yen, South Korean Won, and Bangladeshi Taka.
The value of the Pakistani rupee has declined as Pakistan struggles with a growing current account deficit and as the State Bank of Pakistan’s (SBP) reserves have fallen to their lowest level since November 2019. The coalition government led by Shehbaz Sharif has increased fuel prices for the third time in the past month to comply with IMF “conditionals” to renew the bailout, which has further complicated Pakistan’s economy and population.