KARACHI: Pakistani Rupee (PKR) on Thursday recovered PKR 2.82 to reach PKR 270.51 against the dollar in the interbank foreign exchange market.
The exchange rate recorded a gain of PKR 2.82 in the rupee value to end at PKR 270.51 from previous day’s closing of PKR 273.33 in the interbank foreign exchange market.
READ MORE: Rupee makes sharp recovery of PKR 2.95 against dollar on Feb 08 interbank closing
This second consecutive session in which the rupee made sharp recovery. The local currency recovered PKR 5.77 against the dollar during past two sessions.
The rupee recorded the historic low of PKR 276.58 on February 3, 2023.
Currency experts said that rupee made the sharp recovery due to strict monitoring of the State Bank of Pakistan (SBP) after reports of dollar smuggling to Afghanistan.
READ MORE: Rupee ends near historic low; dollar jumps to PKR 276.28 in interbank
The experts said that that falling foreign exchange reserves were constant threat to exchange rate stability.
The official reserves of the State Bank of Pakistan (SBP) declined by $592 million to $3.086 billion by week ended January 27, 2023 as compared with $3.678 billion a week ago.
The SBP said that the decline in foreign exchange reserves were due to scheduled external repayment.
The present level of the official reserves have fallen to provide import cover for three weeks. The import bill of the country for the month of January 2023 was recorded at $4.856 billion, according to 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: Rupee rebounds against dollar to end at PKR 275.30
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 $17.06 billion.
The foreign exchange reserves of the country recorded a decline of $711 million to $8.742 billion by week ended January 27, 2023 when compared with $9.453 billion by week ended January 20, 2023.
READ MORE: Rupee plummets to historic low of PKR 276.58 to dollar at interbank closing
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 $18.486 billion.
It is important to note that the government already allowed flexibility in exchange rate and raised prices of petroleum products massively to comply with the IMF demands.
