1 Dollar to PKR in 2020: A Year of Volatility
Introduction
The Pakistani Rupee (PKR) has been experiencing significant fluctuations against the United States Dollar (USD) in recent years. 2020 was no exception, with the exchange rate witnessing various highs and lows. In this article, we will explore the trend of 1 USD to PKR in 2020 and analyze the factors that influenced this exchange rate.
Exchange Rate Trend in 2020
The year 2020 began with an exchange rate of around 154.50 PKR per USD. During the first quarter, the PKR experienced a slight depreciation, reaching an average rate of 155.50 PKR per USD. However, in the second quarter, the PKR started to appreciate, and the exchange rate dropped to around 153.50 PKR per USD.
Third Quarter: A Sudden Surge
The third quarter of 2020 saw a sudden surge in the value of the PKR, with the exchange rate plummeting to around 145.50 PKR per USD. This was largely due to the easing of lockdown restrictions and the subsequent improvement in economic activity. The State Bank of Pakistan's (SBP) decision to keep interest rates unchanged also contributed to the PKR's appreciation.
Fourth Quarter: A Reversal of Fortunes
However, the fourth quarter of 2020 saw a reversal of fortunes for the PKR. The exchange rate began to rise again, reaching an average of 158.50 PKR per USD. This was mainly due to a surge in imports and a decline in exports, resulting in a widening trade deficit.
Factors Influencing the Exchange Rate
Several factors contributed to the fluctuations in the exchange rate in 2020. Some of the key factors include:
- COVID-19 Pandemic: The pandemic's impact on global trade and economic activity led to a decline in the value of the PKR.
- Monetary Policy: The SBP's decisions on interest rates and monetary policy had a significant impact on the exchange rate.
- Trade Balance: Pakistan's trade deficit, which widened during the year, put pressure on the PKR.
- Global Economic Trends: The performance of major currencies, such as the USD, also influenced the exchange rate.
Conclusion
In conclusion, the exchange rate of 1 USD to PKR in 2020 was marked by significant volatility. While the PKR experienced both depreciation and appreciation during the year, it ultimately ended the year at a higher exchange rate than it began. Understanding the factors that influence the exchange rate is crucial for businesses, investors, and individuals making financial decisions.
