Dollar slips to PKR 220.41 on improved economic sentiments

Dollar slips to PKR 220.41 on improved economic sentiments

KARACHI: The US dollar slipped by 43 paisas against the Pakistani Rupee (PKR) on Monday owing to improved economic sentiments after FATF decision.

The exchange rate witnessed a gain of 43 paisas in rupee value to end at PKR 220.41 from last Friday’s closing of PKR 220.84 in the interbank foreign exchange market.

READ MORE: Rupee gains 11 paisas to dollar on ADB loan approval

Financial Action Task Force (FATF), the global watchdog, last Friday formally announced giving clearance to Pakistan by removing the country’s name from its grey list.

Further, the sentiments were also improved due to commitment of Asian Development Bank (ADB) to finance the country. The ADB approved a financing of $1.5 billion to the country.

Currency experts said that the approval of loan program by the ADB helped the rupee to make gain.

READ MORE: Dollar inches up to end at PKR 220.95 in interbank market

The ADB in a statement on Friday said that it had approved $1.5 billion in financing to help the Government of Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.

Besides, the rupee was also supported by contraction in current account deficit during the first quarter of the current fiscal year.

Pakistan’s current account deficit has recorded a decline of 37 per cent to $2.21 billion during first quarter (July – September) of fiscal year 2022/2023, according to official data released last week.

READ MORE: Rupee plunges to PKR 220.88 against dollar in interbank

The current account deficit of the country was $3.53 billion in the same quarter of the last fiscal year.

Contraction in current account deficit can be attributed to significant fall in trade deficit. The trade deficit also contracted by 21.32 per cent to $9.22 billion during first quarter of the current fiscal year as compared with the deficit of $11.72 billion in the same quarter of the last fiscal year.

READ MORE: Rupee fall continues; Dollar ends at PKR 219.71 in interbank

Furthermore, the local currency also received support as the level of foreign exchange reserves were remained flat.

Pakistan’s weekly foreign exchange reserves increased nominally to $13.251 billion by week ended October 14, 2022 as compared with $13.247 billion a week ago i.e. October 7, 2022.