KARACHI: Pakistani Rupee (PKR) slumped against the US dollar on Thursday amid tight monitoring of the State Bank of Pakistan (SBP) related to currency transactions.
The exchange rate recorded a decline of 11 paisas in rupee value to end at PKR 223.92 against the dollar from previous day’s closing of PKR 223.81 in the interbank foreign exchange market.
Currency experts said that political uncertainty and weak economic indicators had pressured the exchange rate. They said that a day earlier an international report pointed out that Pakistani rupee was on the risk.
It is important to note that the SBP took various measures to prevent unnecessary outflow of the greenback for giving support the local unit.
These measures included tight monitoring on the exchange companies by checking day to day affairs related to transactions.
Besides, the SBP also imposed restrictions to limit the cash foreign currency up to $5,000 for taking out Pakistan per person per visit.
The currency experts said that the measures taken by the SBP were not enough as Pakistan’s external sector was facing huge challenges.
Latest investment data released by the State Bank of Pakistan (SBP) 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.
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.