KARACHI: The US dollar rallied against the Pakistani Rupee (PKR) on Wednesday amid escalating demand of the foreign currency for import and corporate payments.
The exchange rate witnessed a decline of 50 paisas in rupee value to end at PKR 222.41 to the dollar from previous day’s closing of PKR 221.91 in the interbank foreign exchange market.
It was fourth consecutive session when the rupee witnessed a decline against the dollar.
READ MORE: Dollar end up to PKR 221.91 in interbank on November 15, 2022
Currency experts said that the local currency was under immense pressure due to high demand of the foreign currency for import and corporate payments.
They further said that declining foreign exchange reserves also put pressure on exchange rate.
Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.
READ MORE: Dollar extends gain to PKR amid falling foreign exchange reserves
The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.
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 $13.507 billion.
The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.
READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply
The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.
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 $12.189 billion.
The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.
READ MORE: Rupee makes recovery as limit imposed on dollar cash movement
Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.
On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.
The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.
As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.
