KARACHI: Pakistani Rupee (PKR) ended stable against the US dollar on Monday amid foreign currency demand pressure ahead of a major repayment to be made for Sukuk bonds.
The exchange rate recorded one paisa decline in rupee value to end at PKR 223.95 to the dollar from last Friday’s close of PKR 223.95 in the interbank foreign exchange market.
Currency experts said that the tight monitoring of the State Bank of Pakistan (SBP) to check the outflow kept the dollar demand in control.
They said that the government is scheduled to repay around $1.08 billion against Sukuks in December 2022, which will pressure the exchange rate in coming days.
Experts said that the increase in benchmark policy rate by 100 basis points to 16 per cent also discouraged the manufacturing sector to import raw material at high borrowing cost.
They said that the SBP should be more vigilant were not enough as Pakistan’s external sector was facing huge challenges.
Latest investment data released by revealed the foreign direct investment plunged by 52 per cent in first four months of the current fiscal year.
The current account deficit recorded contraction in the first four months of the current fiscal year it swelled when compared with the previous month.
Pakistan needs foreign inflows on urgent basis to avoid balance of payment crisis. The foreign exchange reserves of Pakistan fell sharply during past few months making it difficult for the government to fulfill its foreign repayment commitments.
Foreign exchange (forex) reserves of Pakistan were at $13.796 billion by week ended November 11, 2022 as compared with $13.721 billion a week ago i.e. November 04, 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 $13.432 billion.
The official foreign exchange reserves of the State Bank nominally increased by $3 million to 7.96 billion by week ended November 11, 2022 as compared with $7.957 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 dropped by $12.185 billion.