KARACHI: Pakistani Rupee (PKR) ended unchanged against the US dollar on Tuesday as the country received $500 million to strengthen external sector.
The exchange rate ended at the same last day’s level of PKR 293.95 to the dollar in the interbank foreign exchange reserves.
Currency experts said that the rupee was under immense pressure due to scheduled payment of about $1.08 billion against commercial loans by December 02, 2022.
READ MORE: PKR ends stable to dollar amid repayment pressure
However, the latest inflows would help the State Bank to buffer its reserves and cool down the prevailing perception of default.
The government on November 29, 2022 received $ 500 million from Asian Infrastructure Investment Bank (AIIB). The funds are deposited with SBP and will augment our reserves.
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.
READ MORE: Rupee falls slightly to dollar amid foreign payment pressure
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.
READ MORE: PKR slumps to dollar amid SBP tight monitoring
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.
READ MORE: Rupee fails to maintain recovery; dollar gains to PKR 223.81
