pakistani rupee bank notes
  • Fitch solutions predicts that the Pakistani Rupee will drop towards 171.00 by next year
  • Ballooning debt amid poor revenue collection and high spending is a problem
  • US Dollar (USD) rises on safe haven flows amid fears over consumption
  • US retail sales in focus

After settling flat in the previous session, the US Dollar Pakistani Rupee (USD/PKR) is advancing on Thursday. At 09:15 UTC, USD/PKR trades +0.1% at 167.30 as the Rupee continues to trade close to its all-time low of 168.45.

The Rupee is trending lower weighed down by a souring mood in the broader market and comments from rating agency Fitch which predicted that the Rupee will weaken further heading towards next year. The agency forecasts that demand for Pakistan assets by foreign investors will cool further over the coming months, denting demand for the Rupee.

Fitch added that concerns over the sustainability of the country’s debt is also causing the Rupee to underperform. Public debt has ballooned and is already up 8.5% compared to June 2019. The government is relying on debt amid weak revenue collection and high levels of expenditure.

The US Dollar is trending higher across the board as investors seek its safe haven properties in risk off trading. The mood is the market has soured from yesterday’s vaccine optimism as concerns over rising US – Chinese tensions and cautious Chinese consumers overshadow stronger than forecast Chinese GDP growth.

Industrial production in mainland China has boosted the economic recover in China, lifting second quarter GDP to a better than forecast 3.2%. Analyst had expected growth of 2.5% in one of the world’s earliest signs of return to growth following the coronavirus crisis. Whilst the data showed strength in the industrial sector, consumption levels fell with retail sales declining for a 5th straight month, which is much more concerning.

Fears are growing that the lack of enthusiasm for spending seen in China could be mirrored across the globe.

Attention will now turn to US retail sales which are expected to show a 5% increase month on month. This is down from May’s 17.7% surge although is likely to still contain pent up demand.


Currencylive.com is a news site only and not a currency trading platform.
Currencylive.com is a site operated by TransferWise Inc. ("We", "Us"), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.