KARACHI: Pakistani Rupee (PKR) strengthened to PKR 280.77 against the dollar on Friday on hopes that the country will soon enter into loan program under International Monetary Fund (IMF).
The exchange rate recorded an increase of PKR 1.53 in rupee value to end at PKR 280.77 from previous day’s closing of PKR 282.30 in the interbank foreign exchange market.
READ MORE: Rupee witnesses big fall against dollar to end PKR 282.30 in interbank
Currency experts said that the local currency made gain owing to optimistic prevailed about resumption of loan program under the IMF.
Besides, the foreign exchange reserves of the country also posted an increase due to inflows received from China.
The rupee recorded the historic low of PKR 285.09 against the dollar on March 02, 2023.
READ MORE: Dollar jumps to PKR 279.12 in interbank foreign exchange market
The experts said that due to delay in staff level agreement between Pakistan and IMF created uncertainty in the market. Furthermore, the rising dollar demand for commodity imports related to holy month of Ramazan also pressured the local currency.
Foreign exchange reserves of the State Bank of Pakistan (SBP) have been increased to a level for providing more than one month import cover, according to official data released on Thursday.
READ MORE: Rupee shows resilience against dollar to end at PKR 277.87
The official reserves of the SBP increased by $487 million to $4.301 billion by week ended March 03, 2023 as compared with $3.814 billion a week ago i.e. February 24, 2023.
The SBP attributed the rise in its official reserves to inflows of $500 million as commercial loan from China.
After many week the official reserves of the central crossed one month import cover. The import bill of the country during the month of February 2023 was recorded at $4 billion.
READ MORE: Rupee inches up against dollar to end at PKR 277.92
Ideally a central bank should have a level of foreign exchange reserves that is equal to three-month of import payment by a country.
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 $15.845 billion.
