Rupee eases against dollar amid sharp decline in forex reserves

Rupee eases against dollar amid sharp decline in forex reserves

KARACHI: Pakistani Rupee (PKR) eased by three paisas against the US dollar on Friday amid massive decline in foreign exchange reserves of the country.

The exchange rate recorded a decline of three paisas in rupee value to end at PKR 224.40 to the dollar from previous day’s closing of PKR 224.37 in the interbank foreign exchange market.

READ MORE: PKR devaluation against dollar continues despite strict monitoring

Currency experts said that the fall in rupee value was nominal considering the sharp deterioration in foreign exchange reserves.

Pakistan’s official foreign exchange reserves have plunged to multi years low to $6.72 billion by week ended December 02, 2022. The official reserves of State Bank of Pakistan (SBP) fell by $784 million to $6.715 billion by week ended December 02, 2022 when compared with $7.499 billion a week ago i.e. November 25, 2022. Previously, the SBP reserves were seen at $7 billion in April 2014.

The central bank said that during the week ended December 02, 2022, SBP reserves decreased by $ 784 million to $ 6,714.9 million.

READ MORE: Dollar advances to PKR 224.16 at interbank closing on Dec 07

This decline is on account of the payment of $1,000 million against maturing Pakistan International Sukuk and some other external debt repayments.

Some of the debt repayments were offset by inflows, mainly $500 million received from Asian Infrastructure Investment Bank (AIIB), the SBP added.

The experts said that the local currency, however, supported by a statement came from the central bank.

READ MORE: Dollar hits PKR 224.11 amid foreign payment demands

SBP Governor Jameel Ahmad a day earlier said that the country will continue to make timely repayments while inflows are expected to increase significantly in the second half of the current fiscal year.

He said, for the fiscal year 2023, around $33 billion were to be repaid to external stakeholders, including the Current Account Deficit (CAD) of $10 billion and $23 billion in loan repayments.

READ MORE: Rupee declines 22 paisas to dollar amid payment demand

Out of the payable $23 billion external debt, Pakistan has already repaid more than $6 billion whereas as a bilateral loan of $4 billion has been rolled over with the cooperation of relevant countries.

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