Pakistan experienced a significant economic downturn, marked by a staggering 24.47% decrease in the value of the rupee against the dollar in the interbank market in 2023. The country grappled with financial woes, an uncertain economic and political landscape, leading to a 20.05% drop in the value of the rupee in the open market.
Notably, the pound and euro gained momentum against the rupee, while the local currency remained relatively stable for the majority of the year. Throughout the calendar year, the value of the dollar in the interbank market saw a total increase of 55.43 rupees, closing at 281.86 rupees by year-end. In the open currency market, the dollar closed at 282.72 rupees, reflecting an increase of 47.22 rupees.
Despite economic challenges, the Pakistan Stock Exchange witnessed a prosperous year for investors in the first eight months of 2023. The market soared to historic highs in the last four months (September to December), attributed to stringent measures taken by the caretaker government. Key initiatives included reinstating the IMF program in August, law enforcement actions, and robust anti-trafficking campaigns across various sectors.
In a remarkable turn of events, the Hundred Index set records, reaching 51,482 points on October 30, followed by new highs of 60,502 points on November 29, and an unprecedented 66,426 points on December 12.
The value of the dollar, however, faced resistance against a backdrop of external payment pressures. The rupee struggled to ease its decline, with the government implementing strategies to match import needs with remittances and export income, ultimately proving effective in stabilizing the exchange rate.
A reduction in the current account deficit positively impacted the rupee, with the interbank rate of the dollar falling below 282 rupees in weekly business. The open market rate dropped to below 283-284 rupees, narrowing the difference between the interbank and open rates to 86 paise.
