PKR falls sharply by Rs2.26 to dollar in interbank midday trading

PKR falls sharply by Rs2.26 to dollar in interbank midday trading

KARACHI: The Pakistan Rupee (PKR) fell sharply by Rs2.26 against the US dollar on Tuesday during midday trading at interbank foreign exchange market.

The dollar is currently trading at Rs184.80 from last day’s closing of Rs182.54 in interbank foreign exchange market.

READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

The rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

READ MORE: Dollar plummets against PKR for seven consecutive days

However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

The rebound in dollar value on Monday may be attributed to the further depletion in foreign exchange reserves of the county.

Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

READ MORE: Rupee up 13 paisas to continue recovery against dollar

Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.