KARACHI: Pakistani Rupee (PKR) appreciated against the dollar on Monday in interbank foreign exchange market.
The exchange rate recorded a gain of 94 paisas in rupee value to end at PKR 261.88 to the dollar from previous day’s closing of PKR 262.82 in the interbank foreign exchange market.
The Rupee gain is credited to expectations that the country will reach a staff level agreement with the International Monetary Fund (IMF).
The rupee during the past few days made significant recovery as the government had met almost all the conditions set by the IMF for continuation of loan program under Extended Fund Facility (EFF).
The local currency recorded a gain of PKR 13.76 or 5 per cent since falling to historic low level of PKR 276.58 to the dollar on February 03, 2023.
READ MORE: PKR makes gain to dollar on hopes of IMF staff level agreement
Currency experts said that the slight gain in foreign exchange reserves of the central bank also helped the local currency to make gain.
The official foreign exchange reserves of the central bank improved by $275 million to $3.192 million by the week ended February 10, 2023 as compared with $2.917 billion a week ago. The current level of the official foreign exchange reserves are only to provide import cover for about two weeks or 19 days.
The import bill for the month of January 2023 has been recorded at $4.856 billion, as per Pakistan Bureau of Statistics (PBS). The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
READ MORE: Rupee continues upward journey; interbank ends at PKR 264.38 to dollar
The official foreign exchange reserves of SBP fell sharply to an almost nine-year low. Previously, the official reserves of the SBP were seen at this level at $3.19 billion in February 2014.
The central bank attributed the decline in foreign exchange reserves to scheduled external repayment.
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 dropped by $16.954 billion.
READ MORE: Rupee appreciates to PKR 265.38 against dollar in interbank
Currency experts said that the low level of foreign exchange reserves remained a threat for exchange rate stability in future.
