KARACHI: The US dollar made a sharp gain against the Pakistan Rupee (PKR) to reach Rs186 during midday trading at interbank foreign exchange market.
The dollar gained around Rs1.56 to reach Rs186 during the midday trading against the last day’s closing of Rs184.44 in the interbank foreign exchange market.
Currency analysts said that due to import and external debt payments the local currency was under severe pressure.
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.
The fresh wave of rupee depreciation may be attributed to higher demand of the foreign currency for external debt repayment.
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 Rs188.18 to the dollar on the day of monetary policy announcement.
However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 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.
The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.