Pakistani Rupee Slumps To Lifetime Low Against the Dollar As Government Bans Imports

Pakistan recorded a slump in imports by over 35% in July following a nationwide ban on non-essential imports. Commenting on the latest development at a news conference in Islamabad, Pakistani finance minister Miftah Ismail asserted that improving trade status would ease the mounting pressure on the Pakistani rupee (PKR).

The Minister revealed imports into Pakistan fell to $5 billion, a 35% drop from the $7.7 billion recorded in June. However, the State Bank of Pakistan and Pakistan’s statistics bureau have yet to pay July figures.

Ismail described the import number as “very welcoming,” noting it was a direct consequence of the government’s ban on all non-essential imports. The Minister added, “it will remove pressure on [the] rupee.”

Pakistani Rupee Under Pressure From Economic Duress

The PKR tapped the 240.00 top, a lifetime high, on Friday, bringing its weekly decline to 5.16%. On a year-to-date (YTD) basis, the PKR has shed about 37%.

Meanwhile, the ban on the import of non-essential commodities was suspended last week, with restrictions remaining for automobiles, mobile phones, and home appliances.

Ismail further noted that the government plans to reduce the existing current account deficit by notable proportions and possibly post a surplus after one or two years.

The South Asian nation has been affected by the ongoing global economic crisis, with its foreign reserves depleting at rapid rates. The nation also struggles to finance a growing current account deficit, which recorded a $2.3 billion spike in June due to a rise in oil imports.

The deficit for the financial year, which ended on June 30, hovered around $17.4 billion, a 521% increase from the previous year. Earlier this month, the Pakistani government reached a staff-level agreement with the IMF to disburse $1.17 billion under a resumed bailout package payment.