KARACHI: The US dollar on Wednesday climbed up by 82 paisas against the Pakistani Rupee to PKR 221.50 owing to rising political tension in the country.
The exchange rate ended with a decline of 82 paisas in rupee value to end at PKR 221.50 to the dollar from previous day’s closing of PKR 220.68 in the interbank foreign exchange market.
Currency experts said that the announcement of the longa march by Pakistan Tehreek I Insaaf (PTI) had shaken investors’ confidence.
PTI Chief Imran Khan two days back announced long march against the present government. He announced the rally would begin from Friday October 28, 2022 for an indefinite period.
Since the announcement of country-wide protest rally the rupee fell PKR 1.77 against the dollar.
PTI Chief Imran Khan was removed as prime minister through a vote of no confidence by the allied political parties in April this year. Imran Khan claimed that his government was toppled by a conspiracy.
Prior to the announcement of the long march, the rupee witnessed recovery against the greenback due to removal of Pakistan name from the grey list of the Financial Action Task Force (FATF).
Further, the sentiments were also improved due to commitment of Asian Development Bank (ADB) to finance the country. The ADB approved a financing of $1.5 billion to the country. Currency experts said that the approval of loan program by the ADB helped the rupee to make gain.
Interestingly, the amount of $1.5 billion was received last night by the State Bank of Pakistan (SBP). However, the fund transfer also failed to support the local currency.
Previously, the rupee was also supported by contraction in current account deficit during the first quarter of the current fiscal year.
Pakistan’s current account deficit has recorded a decline of 37 per cent to $2.21 billion during first quarter (July – September) of fiscal year 2022/2023, according to official data released last week.
The current account deficit of the country was $3.53 billion in the same quarter of the last fiscal year.
Contraction in current account deficit can be attributed to significant fall in trade deficit. The trade deficit also contracted by 21.32 per cent to $9.22 billion during first quarter of the current fiscal year as compared with the deficit of $11.72 billion in the same quarter of the last fiscal year.
Furthermore, the local currency also received support as the level of foreign exchange reserves were remained flat.
Pakistan’s weekly foreign exchange reserves increased nominally to $13.251 billion by week ended October 14, 2022 as compared with $13.247 billion a week ago i.e. October 7, 2022.