KARACHI: Pakistani Rupee (PKR) ended stable against the dollar on Friday owing to Saudi rollover of $3 billion.

The exchange rate ended at PKR 223.69 to the dollar, same previous day level, in the interbank foreign exchange market.

Currency experts said that the market had witnessed high dollar demand owing to import and corporate payments.

READ MORE: SBP foreign exchange reserves fall to $7.5 billion

However, the reports of Saudi approval for extension the term of deposit had support the rupee value.

The Saudi Fund for Development (SFD) extended the term for the deposit provided by the Kingdom of Saudi Arabia in the amount of $3 billion to the State Bank of Pakistan.

The extension of the term of the deposit is a continuation of the support provided by the government of the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, as the deposit aimed to shore up the foreign currency reserves in the Bank and help Pakistan in facing the economic repercussions of the COVID-19 pandemic; it, furthermore, contributed to meet external sector challenges and achieve sustainable economic growth for the country.

READ MORE: Pakistan official reserves fall to around 1 ½ months import coverage

Currency experts said that tightening of monetary policy and contraction in import payment demand helped the rupee to make recovery.

They said that the SBP should be more vigilant because latest efforts were not enough as Pakistan’s external sector was facing huge challenges.

Latest investment data revealed the foreign direct investment plunged by 52 per cent in first four months of the current fiscal year.

The current account deficit recorded a contraction in the first four months of the current fiscal year, but it swelled when compared with the previous month.

Pakistan needs foreign inflows on urgent basis to avoid balance of payment crisis. The foreign exchange reserves of Pakistan fell sharply during past few months making it difficult for the government to fulfill its foreign repayment commitments.

READ MORE: Pakistan forex reserves inch up to $13.796 billion

Official foreign exchange reserves of State Bank of Pakistan (SBP) have depleted by $327 million by week ended November 25, 2022 leaving import cover of only one and half months.

The official foreign exchange reserves of the SBP fell by $327 million to $7.499 billion by week ended November 25, 2022 as compared with $7.826 billion a week ago.

The import bill of the country was at $4.71 billion in October 2022, according to Pakistan Bureau of Statistics (PBS). According to the month import bill the existing foreign exchange reserves of the SBP have reduced to cover only 1.56 months import payment.

The central bank attributed the decline in official reserves to repayment against external debt.

READ MORE: Pakistan FX reserves slip sharply by $958 mn on external payments

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.647 billion.

The total reserves of the country fell by $267 million to $13.378 billion by week ended November 25, 2022 as compared with $13.645 billion a week ago.

The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.850 billion.