KARACHI: The Pakistan Rupee (PKR) fell 94 paisas against the dollar on Friday due to higher external payment demand as the market opened after long holidays.
The exchange rate ended at Rs186.63 to the dollar from previous closing on April 30, 2022 of Rs185.69 in the interbank foreign exchange market.
READ MORE: Dollar gains six paisas against PKR in interbank
Currency experts said that dollar demand remained high during the day because the market reopened after Eid holidays. The government announced the public holidays from May 02 to May 05, 2022 on account of Eid-ul-Fitr.
The experts said that the rupee was also under pressure after the prices of crude oil rebounded in the international markets. Brent futures rose $2.08, or 1.88 per cent, to $112.98per barrel by 0922 GMT, while U.S. West Texas Intermediate (WTI) crude climbed $2.00, or 1.85 per cent, to $110.26 a barrel, according to Reuters.
READ MORE: Rupee gains 24 paisas to dollar in interbank
Pakistan is net importer of petroleum products to meet its domestic demand. The country’s import bill was $14.81 billion during first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.
The depleting foreign exchange reserves are also putting pressure on the local currency.
According to details released by the State Bank of Pakistan (SBP), the official reserves of the central bank fell by $328 million to $10.558 billion by week ended April 23, 2022 as compared with $10.886 billion a week ago. The net foreign exchange reserves of the SBP also include $3 billion from Saudi Arabia, which was deposited with the central bank to support balance of payment.
READ MORE: Dollar appreciates 42 paisas against PKR
The foreign exchange reserves of the country fell to $16.668 billion by week ended April 23, 2022 as compared with $17.045 billion by week ended April 16, 2022.
Pakistan total import bills recorded an increase of 49 per cent to $58.87 billion during the first nine months of the current fiscal year as compared with $39.49 billion in the corresponding period of the last fiscal year.
READ MORE: Rupee recovers third straight day against dollar
This resulted in huge widening in trade deficit of 70 per cent. The trade deficit of the country swelled to $35.39 billion during first nine months of the current fiscal year as compared with the deficit of $20.8 billion in the corresponding months of the last fiscal year.
The higher foreign outflows caused payment imbalances. The current account deficit ballooned to $12.1 billion during July-February 2021/2022 when compared with a surplus of $994 million in the same period of the last fiscal year.
