KARACHI: Pakistani currency ended firmer against dollar on Wednesday as official data revealed significant fall in import bill.
The Pakistani Rupee (PKR) ended PKR 226.95 to the dollar from previous day’s closing PKR 226.94 in the interbank foreign exchange market.
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Currency experts said that imports recorded 32 per cent decline to $5.16 billion in the month of December 2022 when compared with $7.58 billion in the same month of the last year, according to data released by Pakistan Bureau of Statistics (PBS).
Experts however said that the market had high demand of dollars for external payments. The local currency witnessed sharp decline during the current fiscal year.
The fall in the local currency during the year may be attributed to scarcity of dollars and tight schedule of foreign repayments.
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Besides, sharp depletion in foreign exchange reserves and disruption in loan program under International Monetary Fund (IMF) also caused rupee devaluation.
Pakistan’s official foreign exchange reserves have fallen to an alarming level of $5.82 billion by week ended December 23, 2022 as compared with $6.116 billion a week ago i.e. December 16, 2022.
The present level of the official reserves have created default like situation as the country may unable to pay for foreign trade in coming days.
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The import bill of the country for the month of November 2022 was recorded at $5.18 billion, according to Pakistan Bureau of Statistics (PBS).
This shows the official foreign exchange reserves of the country have capacity to provide import cover for only 1.2 months. The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
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The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $14.324 billion.
