KARACHI: The Pakistani Rupee (PKR) recovered 68 paisas against the US dollar on Tuesday owing to expected inflows to support balance of payment.
The exchange rate witnessed a gain of 68 paisas in rupee value to end at PKR 219.73 to the dollar from the previous day’s closing of PKR 220.41 in the interbank foreign exchange market.
READ MORE: Dollar slips to PKR 220.41 on improved economic sentiments
Currency experts believed the removal of name from the grey list of the Financial Action Task Force (FATF) would help the country to secure multilateral funding.
FATF, the global watchdog, last Friday formally announced giving clearance to Pakistan by removing the country’s name from its grey list.
Further, the sentiments were also improved due to commitment of Asian Development Bank (ADB) to finance the country. The ADB approved a financing of $1.5 billion to the country.
READ MORE: Rupee gains 11 paisas to dollar on ADB loan approval
Currency experts said that the approval of loan program by the ADB helped the rupee to make gain.
The ADB in a statement on Friday said that it had approved $1.5 billion in financing to help the Government of Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.
Besides, the rupee was also supported by contraction in current account deficit during the first quarter of the current fiscal year.
READ MORE: Dollar inches up to end at PKR 220.95 in interbank market
Pakistan’s current account deficit has recorded a decline of 37 per cent to $2.21 billion during first quarter (July – September) of fiscal year 2022/2023, according to official data released last week.
The current account deficit of the country was $3.53 billion in the same quarter of the last fiscal year.
Contraction in current account deficit can be attributed to significant fall in trade deficit. The trade deficit also contracted by 21.32 per cent to $9.22 billion during first quarter of the current fiscal year as compared with the deficit of $11.72 billion in the same quarter of the last fiscal year.
READ MORE: Rupee plunges to PKR 220.88 against dollar in interbank
Furthermore, the local currency also received support as the level of foreign exchange reserves were remained flat.
Pakistan’s weekly foreign exchange reserves increased nominally to $13.251 billion by week ended October 14, 2022 as compared with $13.247 billion a week ago i.e. October 7, 2022.