KARACHI: The Pakistani Rupee (PKR) ended stable against the US dollar on Thursday amid higher foreign currency demand for import and corporate payments.
The exchange rate ended at PKR 224.71 to the dollar, the same closing level a day earlier, in the interbank foreign exchange market.
READ MORE: Rupee softens against dollar to PKR 224.71 in interbank
Currency experts said that the exchange rate was under pressure due to demand for import and corporate payments.
They said that in the month of December mostly payments were made for imports. Besides, corporate sector also needs dollars to repatriate their profits and dividends.
The experts attributed the rupee stability to strict monitoring of the State Bank of Pakistan (SBP) to prevent outflow of the greenback.
READ MORE: PKR steady fall continues against dollar in interbank
However, they said that falling foreign exchange reserves also impacting adversely the exchange rate.
Pakistan’s official foreign exchange reserves have plunged to multi years low to $6.72 billion by week ended December 02, 2022. The official reserves of State Bank of Pakistan (SBP) fell by $784 million to $6.715 billion by week ended December 02, 2022 when compared with $7.499 billion a week ago i.e. November 25, 2022. Previously, the SBP reserves were seen at $7 billion in April 2014.
The central bank said that during the week ended December 02, 2022, SBP reserves decreased by $ 784 million to $ 6,714.9 million.
READ MORE: PKR weakens by 25 paisas to dollar on foreign payment demand
This decline is on account of the payment of $1,000 million against maturing Pakistan International Sukuk and some other external debt repayments.
Some of the debt repayments were offset by inflows, mainly $500 million received from Asian Infrastructure Investment Bank (AIIB), the SBP added.
READ MORE: Rupee eases against dollar amid sharp decline in forex reserves
Last week the chief of the central bank made a statement regarding foreign payments to be made by the country.
SBP Governor Jameel Ahmad said that the country will continue to make timely repayments while inflows are expected to increase significantly in the second half of the current fiscal year.
He said, for the fiscal year 2023, around $33 billion were to be repaid to external stakeholders, including the Current Account Deficit (CAD) of $10 billion and $23 billion in loan repayments.
Out of the payable $23 billion external debt, Pakistan has already repaid more than $6 billion whereas as a bilateral loan of $4 billion has been rolled over with the cooperation of relevant countries.
