Karachi, July 7, 2023 – The Pakistani Rupee (PKR) experienced a decline against the dollar on Friday as a result of increased demand ahead of the weekend for import and corporate payments.
In the interbank foreign exchange market, the exchange rate witnessed a decrease of 86 paisas, ending at PKR 277.90 to the dollar compared to the previous day’s closing rate of PKR 277.04.
Currency experts attribute the fall in the rupee’s value to the mounting demand for the US dollar before the weekly holidays. Import payment demand is putting downward pressure on the rupee due to the recent decision by the State Bank of Pakistan (SBP) to lift the ban on opening Letters of Credit (LCs) and allow banks to process payments without prior approval.
READ MORE: Rupee Regains Ground Against Dollar, Closing at PKR 277.04 in Interbank Market
However, experts remain optimistic about the rupee’s future performance, citing the improving foreign exchange reserves of the country. The latest data released by the SBP shows a significant increase of $405 million in Pakistan’s foreign exchange reserves within a week. As of the week ending on June 30, 2023, the country’s foreign exchange reserves reached $9.746 billion, marking a rise from the $9.341 billion recorded by the week ending on June 23, 2023.
READ MORE: Pakistan’s Foreign Exchange Reserves Surge to $9.746 Billion
Furthermore, experts anticipate that Pakistan will receive additional foreign inflows in the coming week, subject to the approval of a bailout package by the executive board of the International Monetary Fund (IMF). Recently, Pakistan and the IMF reached a staff-level agreement, according to which the Fund will provide approximately $3 billion to Pakistan under a 9-month Stand By Agreement (SBA).
These positive developments in the country’s foreign exchange reserves and the potential IMF bailout package approval provide hope for the rupee’s strengthening in the near future.
READ MORE: Dollar Rebounds in Pakistani Currency Market; Gains PKR 1.97
