Pakistan rupee may fall to record low of $350/US dollar by Next Year

The Pakistani rupee (PKR) is expected to continue its downward spiral and reach an all-time low of 350 per dollar by the end of next year.

A report cited by global financial news provider Bloomberg said the PKR is the worst performing currency in Asia this year and will continue to depreciate over the next three years. According to the report, the weakness of PKR is due to Pakistan's high inflation, trade deficit, debt repayment, foreign financing deficit and declining foreign investment.

The report also warns that there could be a shortage of dollars in Pakistan, which could lead to parallel currency markets where the dollar is traded at a higher rate than the official rate. This would damage the credibility of the central bank and the government as they tried to curb illegal currency trading and stabilize the rupee. The report adds that Pakistan's economic problems could continue until 2024 as the country relies on short-term loans and aid from the International Monetary Fund and other lenders to avoid default. According to the report, the market is demanding a higher risk premium for the PKR due to interest costs and an uncertain external balance.

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