KARACHI: The US dollar extended gain against the Pakistani Rupee (PKR) on Monday amid falling foreign exchange reserves of the country.
The exchange rate ended with five paisas decline in rupee value to end at PKR 221.69 to the dollar from last Friday’s closing of PKR 221.64 in the interbank foreign exchange market.
Currency dealers said that the market sentiments were negative due to sharp decline in foreign exchange reserves.
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.
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.
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.
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.