KARACHI: The Pakistani rupee recovered Rs2.13 against the US dollar on Wednesday to close at Rs221.91 at closing of interbank foreign exchange market.
Previously, the exchange rate closed at Rs224.04 to the dollar on August 05, 2022.
The rupee continued the gain for seventh straight session after falling to historic low. The rupee witnessed record low at Rs239.94 on July 28, 2022. However, since then the rupee is continuously gaining to the dollar.
The local units gained about Rs18.75 or 7.51 per cent during past seven trading days.
Currency dealers said that the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.
The SBP initiated inspection against the exchange companies on August 01, 2022. On August 2, 2022, the SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.
The central bank also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.
The dealers said that after assurance from the International Monetary Fund (IMF) that Pakistan had met all the requirement for the disbursement of $1.2 billion tranche under Extended Fund Facility (EFF).
The currency experts said that the rupee was also supported by reduction in trade deficit during the first month of the current fiscal year.
The trade deficit narrowed by 18.33 per cent to $2.62 billion for the month of July 2022 as compared with the deficit of $3.23 billion in the same month of the last year.
The trade deficit was mainly contracted due to 12.8 per cent decline in import bill during the month under review. The import bill of the country was reduced to $4.86 billion in July 2022 as compared with $5.57 billion in the same month of the last year.
The experts, however, expressed concerns over massive decline in foreign exchange reserves. They said that expected inflows from IMF would help the country’s external sector.