KARACHI: Pakistan Rupee (PKR) recovered sharply against dollar on Friday and closed at PKR 278.46 to the dollar after hitting an all-time low against the greenback.
The exchange rate witnessed a gain of PKR 6.93 in rupee value to end at PKR 278.46 to the dollar from last day’s closing of PKR 285.09, the historic low of the rupee, in interbank foreign exchange market.
Currency experts said that the rupee recovered due to latest trade numbers showed massive decline in imports.
READ MORE: Rupee makes historic low against dollar at PKR 285.09
Country’s imports recorded 23.56 per cent decline to $40.1 billion during first eight months (July – February) 2022-2023 when compared with $52.45 billion in the same months of the last fiscal year.
However, exports have also decreased by 8.65 per cent to $18.79 billion during first eight months of the current fiscal year when compared with $20.57 billion in the corresponding period of the last fiscal year.
Therefore, Pakistan’s trade deficit contracted by 33 per cent to $21.3 billion during first eight months (July – February) of fiscal year 2022-2023. The fiscal deficit of the country was $31.88 billion during the corresponding months of the last fiscal year.
READ MORE; Rupee plunges by PKR 4.61 to dollar on rating downgrade
On the other hand, foreign exchange reserves of the country improved with inflows received from China.
The total foreign exchange reserves of the country have increased by $542 million to $9.268 billion by week ended February 24, 2023 as compared with $8.726 billion a week ago.
The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $17.96 billion.
The foreign exchange reserves of SBP increased by $556 million to $3.814 billion by week ended February 24, 2023 as compared with $3.258 billion a week ago i.e. February 17, 2023.
READ MORE: Rupee declines by PKR 1.58 to dollar on import payment demand
Pakistan is facing massive shortfall of foreign exchange to support its balance of payment. The government is striving hard to strike a deal with the International Monetary Fund (IMF) for obtaining a tranche of $1.2 billion under Extended Fund Facility (EFF).
However, in a positive development about $700 million from China were transferred last week, which improved stock of the foreign exchange reserves.
READ MORE: Dollar eases by seven paisas to Pakistani rupee in interbank
The SBP attributed the gain in official reserves to $700 million as government of Pakistan commercial loan disbursement from China.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP dropped by $16.332 billion.
