KARACHI: The US dollar tumbled against the Pakistani Rupee (PKR) by Rs2.63 on Monday on the nomination of Ishaq Dar as finance minister of the country.
The exchange rate recorded a gain of Rs2.63 in rupee value to end at Rs237.02 to the dollar from last Friday’s closing of Rs239.65 in the interbank foreign exchange market.
Currency experts said that the market responded positively to nomination of Ishaq Dar as the finance minister by the present coalition government headed by PML (N).
READ MORE: PKR ends 15-day losing streak; recovers against dollar
According to reports Ishaq Dar would assume the charge on Tuesday. A day earlier, Miftah Ismail had announced to resign from the portfolio of the finance minister.
The experts said that the market was expecting improvement in rupee value on Dar’s return. Previously, Dar had served as finance minister and he was known for controlling the exchange rate. Although, Dar was criticized for stabilizing the local currency artificially.
Earlier, in the day the dollar slipped by more than four rupees but later it recovered earlier day’s losses.
It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.
READ MORE: Rupee slumps for 15th straight session against dollar
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.
READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65
Saudi Fund for Development (SFD) has confirmed rollover of $3 billion deposit maturing on December 05, 2022 for one year. Deposit is placed with SBP and is part of its forex reserves. This reflects continuing strong and special relationship between KSA and Pakistan, according to the SBP.
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.
