KARACHI: The US dollar continued to make gain against the Pakistan Rupee (PKR) on Thursday and ended near PKR 187 in interbank foreign exchange market.
The exchange rate witnessed a decline PKR 1.05 in rupee value to close at PKR 186.97 to the dollar from previous day’s closing of PKR 185.92 in interbank foreign exchange market.
The dollar continued to make gain for the last four trading sessions. The greenback stronger by PKR 5.42 since April 16, 2022 when the exchange rate was PKR 181.55.
It is pertinent to mention that the local currency made this recovery after touching all-time low at PKR 188.18 on April 07, 2022.
The fresh wave of rupee depreciation has been attributed to import and external debt payments.
The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.
Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.
The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low PKR 188.18 to the dollar on the day of monetary policy announcement.
However, following the announcement the rupee rallied for seven straight days and recovered PKR 6.63 against the dollar.
The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.
Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.
According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.
The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.
Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.