KARACHI: Pakistani Rupee (PKR) on Wednesday appreciated to PKR 265.38 to the dollar in the interbank foreign exchange market.
The exchange rate recorded a gain of PKR 1.96 to the dollar from previous day’s closing of PKR 267.34 in the interbank foreign exchange market.
READ MORE: Rupee recovers sharply against dollar amid falling foreign inflows
The local currency recovered PKR11 or 4.05 per cent against the dollar since falling to record low of PKR 276.58 on February 03, 2023.
Currency experts said that the local unit was gaining due to implementation of measures by the government that were set by the International Monetary Fund (IMF).
Currency experts said that the tight monitoring of the central bank helped the rupee to make gain.
They said that the rupee had gained despite high demand for the greenback for import and corporate payments.
READ MORE: Rupee weakens by 16 paisas to dollar amid falling foreign exchange reserves
It is important to note that the rupee made gains despite fall in remittances, exports and foreign exchange reserves.
Pakistani workers have remitted around $16 billion to their homeland during the first seven months (July – January) of fiscal year 2022-2023.
The inflows of remittances recorded an 11 per cent decline during the period under review when compared with $18 billion received in the corresponding period of the last fiscal year.
The exports also recorded a decline of 7.16 per cent to $16.47 billion during first seven months of the current fiscal year as compared with $17.74 billion in the same period of the last fiscal year.
READ MORE: Rupee makes gain to dollar amid sharp fall in forex reserves
The official reserves of the State Bank of Pakistan (SBP) fell by $169 million to $2.917 billion by week ended February 03, 2023 as compared with $3.086 billion a week ago i.e. January 07, 2023.
The current level of the official foreign exchange reserves are only to provide import cover for about two weeks or 18 days.
The import bill for the month of January 2023 has been recorded at $4.856 billion, as per 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.
The official foreign exchange reserves of SBP fell sharply to an almost nine-year low. Previously, the official reserves of the SBP were seen at this level at $3.87 billion in February 2014.
READ MORE: Rupee regains sharply; dollar ends at PKR 270.51 in interbank
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP dropped by $17.229 billion.
The currency experts said that the rupee was also gaining on hopes that next tranche under Extended Fund Facility (EFF) would be released after talks with International Monetary Fund (IMF).
However, the latest reports suggested that the country would further wait for the inflows as IMF had not finalized the ninth review of the program.
