KARACHI: The Pakistani Rupee made a historic single day recovery of Rs9.58 against the US dollar on Wednesday to close at Rs228.80 in the interbank foreign exchange market.
The exchange rate recorded a recovery of Rs9.58 in rupee value to end at Rs228.80 to the dollar from previous day’s closing of Rs238.38 in the interbank foreign exchange market.
The rupee made recovery for the fourth consecutive day after the Chief of the Army Staff (COAS) telephoned to the US for speeding up the release of IMF tranche.
The rupee recorded historic low of Rs239.94 against the dollar on July 28, 2022.
Analysts said that expected inflows from the IMF of $1.2 billion, there will be multilateral inflows unlocking, followed by bilateral/friendly countries, and coupled with global and local recession impacting/reducing Oil and food/commodity prices globally, there will be much lower imports (exports will also be hit), thereby lowering demand for dollar outflows. This should help improve PKR against the US$, at least for some time.
Currency experts said that the fall in import bill during the month of July 2022 eased the pressure on the foreign currency demand. Further, the International Monetary Fund (IMF) likely to release the tranche by end of this month.
The free-fall in rupee continued for the past many months against the greenback due to political instability and weak economic indicators.
The experts said that the continuous decline in rupee value may also be attributed to the fall in foreign exchange reserves.
The foreign exchange reserves of the country have further declined.
Pakistan’s foreign exchange reserves have declined by $368 million to $15.242 billion by week ended July 15, 2022. The foreign exchange reserves of the country were $15.61 billion a week ago i.e. July 07, 2022.
The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $11.986 billion.
The official reserves of the State Bank also depleted by $388 billion to $9.329 billion by week ended July 15, 2022 as compared with $9.717 billion a week ago.
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 declined by $10.817 billion.