The Pakistani rupee is not the only currency rapidly losing its value against the US dollar — which has grown stronger against major world currencies including Euro — but it has been ranked near the top among the worst performing regional currencies.
The Pakistani rupee has lost 32% of its value in 2022. Only the Sri Lankan rupee lost more value, 78.4%, than the PKR, a report by Topline Securities said.
The report said that 12 regional currencies have lost their value against the greenback in recent months.
The value of the Sri Lankan rupee against the US dollar has dropped to SLRs361.75 and the country has already defaulted on its international debt obligations. The PKR trails closely behind at Rs232.93.
Thailand’s Baht turned out to be the third worst performing currency in the region, losing 10.6% of its value this year against the US dollar.
Bangladeshi Taka has been ranked four among the worst performing currencies after losing 10% of its value.
South Korean currency lost 9.9% of its value, Taiwan’s 8.2%, the Indian rupee 7.2%, the Malaysian Ringgit 6.9%, the Chinese Yen 6.3%, Indonesian Rupiah 5.1%, and Vietnam’s currency lost 2.4% of its value this year.
The Pakistani rupee has been in a downward spiral since the July 17 Punjab by-elections, which stoked political uncertainty in the country.
The US dollar has appreciated 12.06% against PKR in the month of July so far, according to Arif Habib Securities.
The Forex Association of Pakistan says the Pakistani rupee has been declining more rapidly against the greenback compared to other currencies. On Tuesday, PKR shed 1.3% while Sri Lankan rupee appreciated 0.1%. South Korea, the Philippines, and Vietnam saw their currencies recover on Tuesday, though other regional currencies depreciated, albeit slightly, against the US dollar.
The US dollar has appreciated in recent weeks on the back of the Federal Reserve’s measures to check runaway inflation which has peaked at the highest level in four decades.
The Federal Reserve increased the interest rate in the past few months and plans to push up the rate by another 70 to 100 basis points on July 27.
This will likely strengthen the US dollar against global currencies and countries like Pakistan and Sri Lanka, with poor economies, will pay more price for the decision taken in Washington DC.
PKR on Johns Hopkins University’s watch list
Meanwhile, Johns Hopkins University has included the Pakistan rupee on its currency watch list at 15th place, below Sri Lankan, Iranian and Turkish currencies.
The list also features war-ravaged Ukraine’s currency just above the PKR.
On the top is the Venezuelan Bolivar which has lost 99% of its value since January 2020. The Pakistani rupee has lost 32.24% of its value as of July 22, 2022, Johns Hopkins University said.