KARACHI: Pakistani Rupee (PKR) plunged by 27 per cent or PKR 48.26 to the dollar during the year 2022.
The exchange rate ended at PKR 226.43 to the dollar on Friday, the last trading day of year 2022 at the interbank foreign exchange market. The exchange rate started the year at PKR 178.17 to the dollar.
The rupee witnessed upheaval during the year due to political and economic uncertainties. During the year the rupee fell to record low of PKR 239.94 to the dollar on July 28, 2022.
READ MORE: Dollar rises to PKR 226.41 as demand jumps for import, corporate payments
The fall in the local currency during the year may be attributed to scarcity of dollars and tight schedule of foreign repayments. Besides, sharp depletion in foreign exchange reserves and disruption in loan program under International Monetary Fund (IMF) also caused rupee devaluation.
Pakistan’s official foreign exchange reserves have fallen to an alarming level of $5.82 billion by week ended December 23, 2022 as compared with $6.116 billion a week ago i.e. December 16, 2022.
The present level of the official reserves have created default like situation as the country may unable to pay for foreign trade in coming days.
READ MORE: Rupee further weakens to dollar as SBP lifts ban on imports
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 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 $14.324 billion.
READ MORE: Rupee free fall continues; dollar hits PKR 226.15 in interbank
The total foreign exchange reserves of the country slipped by $293 million to $11.707 billion by week ended December 23, 2022 when compared with $12 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 $15.521 billion.
READ MORE: Rupee depreciates to PKR 225.82 against dollar in interbank
Since the 9th review of IMF program has been delayed and decline in export earnings and inflows of foreign remittances posed further threat of rupee devaluation.
Analysts at Topline Securities have estimated that the local currency may fall to around PKR 270 to the dollar by end of fiscal year 2022/2023.
