KARACHI: The Pakistani rupee declined 41 paisas, as the dollar crossed Rs177 at midday in the interbank exchange market on Thursday.

The greenback is being traded at Rs177.15 in the midday trading at the interbank exchange.

The exchange market closed at Rs176.74 on Wednesday, January 5, 2022.

The local currency witnessed a decline in the session, amid the rising import bill and the widening of the trade deficit, dealers said.

The country’s trade deficit during July-December 2021 widened by a sharp 106.4 per cent to $25.478 billion on a year-on-year basis, which was driven largely by a nearly triple increase in imports, compared with exports, the data released by the Pakistan Bureau of Statistics (PBS) showed.

During December 2021, Pakistan’s imports decreased $1 billion to $6.9 billion, compared with $7.9 billion in November 2021. The import projection for December 2021 was $6.2 billion.

The falling foreign exchange reserves would remain a challenge for the local currency.

The official foreign exchange reserves of the State Bank of Pakistan (SBP) slipped $299 million to $17.85 billion by the week ended December 24, 2021, compared with $18.15 billion a week ago.

The official foreign exchange reserves of the central bank is the import cover for 2.25 months, which is below the benchmark of three months.

However, in the open market, buying and selling of the dollar was recorded at Rs178.3/Rs179.4 at 12:45pm PST.

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