KARACHI: Pakistani Rupee (PKR) slipped to Rs210.95 against the dollar on Friday despite an agreement signed by the country with the international Monetary Fund (IMF).
The exchange rate recorded a decline of Rs1.15 in the rupee value to end at rs210.95 to the dollar from previous day’s closing of Rs209.80 in the interbank foreign exchange market.
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A day earlier, the IMF issued a statement regarding the signing of staff level agreement with Pakistan for release of next tranche subject to approval the IMF executive board.
IMF staff and the Pakistani authorities have reached a staff level agreement on policies to complete the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF). The agreement is subject to approval by the IMF’s Executive Board. Subject to Board approval, about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the program to about $4.2 billion, the IMF said.
The rupee has recorded all-time low at Rs211.92 on June 22, 2022.
READ MORE: Rupee drops to Rs210.10 against dollar in interbank
Currency experts said that falling foreign exchange reserves were also major reason for the rupee depreciation.
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.
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.
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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.
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: Dollar ends near Rs208 in interbank; Rupee fall continues
