According to predictions by Trading Economics’ global macro models and expert forecasts, the Pakistani rupee (PKR) is anticipated to reach 293.52 against the US dollar by the end of the current quarter.
In a year, the agency predicts the PKR to stand at 317.29. Trading Economics, offering information for 196 countries, provides users with historical and forecast data related to economic indicators, exchange rates, stock market indexes, government bond yields, and commodity prices.
Notably, the USD-PKR spot exchange rate is quoted and exchanged on the same day, whereas the USD-PKR forward rate is quoted today for delivery and payment at a specific future date.
Meanwhile, Bank of America (BofA) Securities projected a potential devaluation of the Pakistani rupee to Rs340 against the US dollar. This is due to substantial domestic borrowing, significant interest payments, and the impending need to restructure unsustainable debt in 2024 and 2025. On Wednesday, the Pakistani rupee concluded trading at Rs277.41 against the US dollar in the interbank market.
BofA Securities predicts a sustained high inflation rate over the coming years, forecasting a rate of 26% in FY24. It also suggests a potential hike in Pakistan’s central bank’s key policy rate to 25% within the year, up from the current 22%.
In their report titled “Pakistan Viewpoint – Running out of ‘orthodox’ options”, dated June 30, BofA expressed that despite the PKR potentially already achieving its fair value at Rs286 against the USD, the significant domestic borrowing of Rs2.5 trillion could further depreciate it by 15-25%, pushing it around Rs340 to a dollar.
