The Pakistani rupee will probably end the year as Asia’s worst-performing currency. It has fallen about 20% against the dollar this year and financial experts say its troubles are far from over. BMI analysts say the currency will fall to 350 rupees by the end of next year, while Karachi-based brokerage Topline Securities Ltd. sees it dropping to 324 rupees. It closed at 285.64 rupees on Monday.
Pakistan’s high debt payments and an external funding gap are weighing on the rupee. The country was on the brink of a default this year, and falling investments from overseas and Asia’s fastest inflation are adding to its woes. Remittances also stay muted, making it more dependent on foreign aid for dollar flows.
The International Monetary Fund this month agreed to a $700 million payout, helping the nation stave off a default for now. Concerns remain its challenges may extend well into 2024, with the government requiring more aid for its fragile economy.