KARACHI: The Pakistan Rupee (PKR) recovered eight paisas against the dollar on Thursday ahead of long holidays for Eid ul Adha.
The exchange rate recorded a gain of eight paisas in rupee value to end at Rs207.91 to the dollar from previous day’s closing of Rs207.99 in the interbank foreign exchange market.
The government has announced holidays from July 08 to July 12, 2022 on the account of Eid ul Adha.
Currency experts said that the foreign exchange market was expecting a monetary tightening in today’s (July 7) monetary policy meeting. They said that the market was anticipating another 100 basis points hike which would ease pressure on dollar demand.
The rupee recorded an all-time low Rs211.93 to the dollar on June 22, 2022.
The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar. The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.
During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.
The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.
The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.
The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.
In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.