Dollar surges to PKR 220.66 ahead IMF board meeting

Dollar surges to PKR 220.66 ahead IMF board meeting

KARACHI: The US dollar surged against Pakistani Rupee (PKR) to Rs220.66 on Friday ahead of the executive board meeting of the International Monetary Fund (IMF).

The IMF board meeting is scheduled for August 29, 2022 which will discuss and likely to approve tranche for Pakistan under Extended Fund Facility (EFF).

On Friday August 26, 2022, the rupee recorded a decline of Rs1.25 to end at Rs220.66 against the dollar from previous day’s close of Rs219.41 in the interbank foreign exchange market. The rupee recorded an all time low against dollar at Rs239.94 on July 28, 2022.

Currency experts said that the rupee may recover once funds from the IMF are transferred to Pakistan.

The currency market witnessed a non-stop depreciation in rupee value since the government lifted the ban on import of luxury and non-essential items. Besides, the prices of international oil are also seeing a rising trend.

The government on August 20, 2022 withdrew the ban on import of luxury and non-essential items. The government on May 19, 2022 imposed this ban in the wake of massive depreciation in rupee value and significant depletion of foreign exchange reserves.

The rupee witnessed a continuous decline against the dollar since the government lifted the ban. The local currency depreciated continuously during the week (August 22 – August 26) and fell Rs6.01 or 2.8 per cent during the period.

The currency experts said that the vertical decline in foreign exchange reserves also put pressure on rupee value.

Pakistan’s foreign exchange reserves fell by $91 million to $13.522 billion by the week ended August 19, 2022. The foreign exchange reserves of the country were at $13.613 billion a week ago i.e. August 12, 2022.

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.703 billion.

The official foreign exchange reserves of the State Bank witnessed a decline of $87 million to $7.81 billion by the week ended August 19, 2022 as against $7.897 billion a week ago.

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.336 billion.