KARACHI: The Pakistani Rupee (PKR) outperformed the dollar on Friday and reached PKR 259.99 in interbank foreign exchange market.
The exchange rate recorded a gain of 94 paisas in rupee value to reach PKR 259.99 to the dollar from previous day’s closing of PKR 260.93 in the interbank foreign exchange market.
READ MORE: Rupee ends at PKR 260.93 to dollar in interbank forex market
Currency experts said that the rupee has maintained an upward journey against the greenback owing to expected inflows from China Development Bank.
Finance Minister Ishaq Dar on February 22, 2023 announced that China Development Bank (CDB) approved a loan of $700 million for Pakistan.
“Formalities completed and board of CDB has approved the facility of $700 million for Pakistan. This amount is expected to be received this week by State Bank of Pakistan (SBP) which will shore up its foreign exchange reserves,” according to a Tweet of the finance minister.
READ MORE: Interbank market ends at PKR 261.90 to dollar as rupee makes recovery
The local currency recorded a historic low of Rs276.58 to the dollar on February 03, 2023. However, after touching the lowest level the local currency recovered 6 per cent or Rs16.59 to the dollar till the end of market on February 24, 2023.
The currency experts said that the market was also expecting successful discussions between local authorities and the IMF, which will help in release of tranche amounting $1.2 billion.
The experts further said that the approval of IMF tranche under Extended Fund Facility (EFF) would also open doors for inflows from other friendly countries.
The rupee is also making gains due to slight increase in official foreign exchange reserves of the State Bank of Pakistan (SBP), which have depleted to an alarming levels.
READ MORE: PKR slips by 63 paisas to dollar amid rising foreign payment demand
The official foreign exchange reserves of the central bank increased by $65 million to $3.258 billion by the week ended February 17, 2023 as compared with $3.193 billion a week ago.
The current level of the official foreign exchange reserves are only to provide import cover for about three weeks.
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.
READ MORE: PKR appreciates by 94 paisas against dollar in interbank
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 $3.19 billion in February 2014.
