KARACHI: Pakistani Rupee (PKR) fell by 19 paisas against the dollar on Monday due to sharp decline in foreign exchange reserves and mounting dollar demand for import payments.
The exchange rate recorded the decline of 19 paisas to end at PKR 228.34 to the dollar from last Friday’s closing of PKR 228.15 in the interbank foreign exchange market.
READ MORE: Rupee ends firmer despite sharp decline in foreign exchange reserves
Currency experts said that falling foreign exchange reserves and rising import payment demand put pressure on the rupee value.
The foreign exchange reserves of the country sharply declined as per data released by the State Bank of Pakistan (SBP) a day earlier.
Official foreign exchange reserves of SBP fell to only $4.34 billion by week ended January 06, 2023. The SBP’s reserves fell by $1.233 billion from the level of $5.576 billion a week ago i.e. December 30, 2022.
READ MORE: Rupee falls to PKR 228.14 against dollar in interbank foreign exchange market
The present level of the official reserves have fallen below one month import cover. The import bill of the country for the month of December 2022 was recorded at $5.16 billion, according to 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: Dollar rises to PKR 227.93 in interbank foreign exchange market
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 $16.803 billion.
The total foreign exchange of the country also fell by $1.234 billion to $10.188 billion by week ended January 06, 2023 as compared with $11.422 billion a week ago.
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 $17.04 billion.
READ MORE: Rupee falls for 27th session to PKR 227.88 against dollar
The currency experts said that the delay in IMF talks for extended fund facility would pressure the local currency in coming days.