KARACHI: US dollar plunged to Pakistan Rupee (PKR) 233.50 in early day trading on Tuesday September 27, 2022 owing to change of finance minister and falling international oil prices.
The foreign currency lost PKR 3.52 and was being traded at PKR 233.50 by 10:00 AM (Pakistan Standard Time) as compared with last day closing of PKR 237.02 in interbank foreign exchange market.
Currency analysts said that change of finance minister had impacted the market positively. The foreign exchange market reacted to the change a day earlier as well.
Ishaq Dar has been nominated for the slot of Pakistan Finance Minister. He had already severed at this portfolio in the previous PML (N) government. Dar was known for controlling the exchange rate. Although many quarters had criticized him for artificial stabilizing the rupee. Dar is scheduled to take oath as finance minister today.
It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.
During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.
The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.
Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.
Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.
However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.
The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).
The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.
The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.
The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.
The rupee also fell due to continuous depletion in foreign exchange reserves of the country.