Pakistani rupee could weaken to Rs340 against USD by June 2024

The Pakistani rupee is expected to trade at Rs293.52 against the United States dollar (USD) by the end of September this year and as low as Rs317 to Rs340 by June 2024.

This is according to global macro models and analysts’ forecasts by Trading Economics, an agency that provides accurate information, historical data, and economic indicators for 196 countries.

The global agency estimates the PKR to trade at Rs317.29 in 12 months. It sees the Pakistani rupee falling to Rs293.52 against the greenback to as low as Rs317.29 by June next year.

US financial services firm Bank of America (BofA) Securities predicted that Pakistan’s currency could devalue to Rs340 against the US dollar due to high domestic borrowing, substantial interest payments, and the need to restructure unsustainable debt in 2024 and 2025.

The New York-based BofA Securities expects inflation in Pakistan to remain high over the next few years, with a projection of 26 percent in Fiscal Year 2023-24.

It also anticipates that Pakistan’s central bank may raise the key policy rate to 25 percent in the year, compared to the current rate of 22 percent.

In a report on June 30, BoFA stated although they believe the Pakistani rupee may have already reached its fair value at Rs286 against the USD, the high domestic borrowing of Rs2.5 trillion could weaken it by another 15-25pc to around Rs340 to a dollar.