KARACHI: The US dollar eased by seven paisas against the Pakistani Rupee (PKR) on Monday owing to inflows received from a Chinese bank.
The exchange rate recorded a gain of seven paisas in rupee value to end at PKR 259.92 to the dollar from last Friday closing of Rs259.99 in the interbank foreign exchange market.
READ MORE: Rupee outperforms dollar to reach PKR 259.99 in interbank market
Currency experts said that last week the country received around $700 million from China Development Bank (CDB), which would improve the current position of the foreign exchange reserves.
The local currency recorded a historic low of Rs276.58 to the dollar on February 03, 2023. However, after touching the lowest level the local currency recovered 6 per cent or Rs16.88 to the dollar till the end of market on February 27, 2023.
READ MORE: Rupee ends at PKR 260.93 to dollar in interbank forex market
The rupee is making recovery due to IMF conditions that have been met by the local authorities for obtaining a tranche of $1.2 billion under Extended Fund Facility (EFF).
The country is hoping to finalize the staff level agreement by this week, which will make it possible for the release of the tranche.
In order to meet IMF conditions, the government announced a phenomenal increase in prices of electricity, gas and petroleum products. Besides, the government also announced a mini budget for generating additional revenue of Rs170 billion.
READ MORE: Interbank market ends at PKR 261.90 to dollar as rupee makes recovery
The country’s foreign exchange reserves depleted sharply during the past one year and presently at an alarming level. However, in the past two weeks the official reserves slightly increased, giving some breathing room to the local currency.
The official foreign exchange reserves of the State Bank of Pakistan (SBP) increased by $65 million to $3.258 billion by the week ended February 17, 2023 as compared with $3.193 billion a week ago.
The current level of the official foreign exchange reserves are only to provide import cover for about two weeks or 19 days.
READ MORE: PKR slips by 63 paisas to dollar amid rising foreign payment demand
The import bill for the month of January 2023 has been recorded at $4.856 billion, as per Pakistan Bureau of Statistics (PBS). The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
The official foreign exchange reserves of SBP fell sharply to an almost nine-year low. Previously, the official reserves of the SBP were seen at this level at $3.19 billion in February 2014.
