KARACHI: Pakistani Rupee (PKR) has depreciated by 18 paisas against the dollar on Monday to end at PKR 225.82 in the interbank foreign exchange market.
The exchange rate ended at PKR 225.64 to the dollar on last Friday’s trading at the interbank foreign exchange market.
Experts said that the exchange rate under immense pressure due to political uncertainty and economic weaknesses.
They said that dollar demand in the month of December usually on the higher side for payment of imports and repatriation of profit and dividends.
The local currency witnessed 10.24 per cent depreciation against the greenback during the current fiscal year to date. The exchange rate started the fiscal year on July 01, 2022 at PKR 204.85 ended at the current level of PKR 225.82 to the dollar in the interbank foreign exchange market.
The experts said that the major reason for the fall in rupee value was significant reduction in foreign exchange reserves of the country.
The official foreign exchange reserves of Pakistan reduced to provide about one month import cover.
The official foreign exchange reserves of the State Bank Pakistan (SBP) fell to $6.12 billion by week ended December 16, 2022. Whereas, the import bill of the country for the month of November 2022 was recorded at $5.18 billion, according to Pakistan Bureau of Statistics (PBS).
This shows the official foreign exchange reserves of the country have capacity to provide import cover for only 1.2 months. The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
The central bank said that its foreign exchange reserves fell by $584 million to $6.12 billion by week ended December 16, 2022 when compared with $6.70 billion a week ago i.e. December 09, 2022.
State Bank attributed the decline in official reserves to external debt repayment. The current level of reserves witnessed multi years low as the SBP reserves were seen at $7 billion in April 2014.
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 $14.026 billion.
The total foreign exchange reserves of the country slipped by $570 million to $12 billion by week ended December 19, 2022 when compared with $12.57 billion a week ago.
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 $15.228 billion.
