PKR plunges Rs227 to dollar at interbank midday trading

PKR plunges Rs227 to dollar at interbank midday trading

KARACHI: The Pakistani Rupee (PKR) on Thursday plunged to a new low of Rs227 against the US dollar during midday trading at interbank foreign exchange market.

The exchange rate recorded a decline of Rs2.08 in rupee value to trade at Rs227 against the dollar, which is all time low in midday trading from previous day’s closing of Rs224.92 in interbank foreign exchange market.

READ MORE: Rupee hits fresh low Rs224.92 to dollar at interbank closing

Currency experts said that the local unit was under pressure due to political instability.

The experts also believed that the falling foreign exchange reserves also putting pressure on rupee stability.

The foreign exchange reserves of Pakistan have depleted by $454 million to $15.742 billion by week ended June 30, 2022. The foreign exchange reserves of the country were at $16.196 billion a week ago i.e. June 24, 2022.

READ MORE: Pakistani Rupee crashes to Rs222 against Dollar at closing on July 19, 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 $11.486 billion.

The official reserves of the State Bank also recorded a decline of $493 million to $9.816 billion by week ended June 30, 2022 as compared with $10.309 billion a week ago.

The central bank attributed the decline in foreign exchange reserves to external debt repayments.

It is pertinent to mention that the SBP received about $2.3 billion from Chinese banks for buildup of foreign exchange reserves. However, despite receiving the amount the external debt payment kept the pressure on the reserves.

READ MORE: Rupee plummets record low at Rs215.20 to dollar

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 declined by $10.33 billion.

The SBP on July 07, 2022 announced a hike of 125 basis points in policy rate to bring at 15 per cent. The purpose of increasing the interest rate was to curb the demand and support the rupee value. However, the effort of the SBP failed to support the rupee value.

READ MORE: Fitch revises Pakistan’s outlook to negative