KARACHI: The Pakistani rupee gained 24 paisas against the dollar on Friday, due to reduced demand for the dollar ahead of Eid holidays and the progress made in Pakistan’s talk with the International Monetary Fund (IMF), dealers said.
The local unit gained 24 paisas to close at Rs185.63 to the dollar from the previous day’s closing of Rs185.87 in the interbank foreign exchange market.
The dealers said the local currency showed growth against the greenback as the demand for the import payment was reduced amid upcoming Eid holiday, while the workers’ record remittances during the month of March also lent support to the rupee.
Pakistan and the IMF agreed to extend the stalled bailout programme by up to one year and increase the loan size to $8 billion, to provide the much-needed stability to the markets and the rupee, which helped boost the investors’ confidence during the outgoing week.
The IMF mission will visit Pakistan in May to resume discussions over policies for completing the seventh EFF review.
The local currency hit the historic low of Rs188.18 on April 7, as the country faced the worst political crisis resulting in uncertain economic conditions.
The country’s foreign exchange reserves fell by $377 million in the week ended on April 23. The total liquid foreign reserves held by the country stood at $16.668 billion, compared with $17.045 billion in the previous month, the State Bank of Pakistan (SBP) said.
The reserves held by the State Bank of Pakistan declined by $328 million to $10.558 billion on external debt and other payments, the central bank added.
The ballooning current account deficit is another reason for escalation in the dollar value. Pakistan’s current account deficit ballooned to $12 billion during the first eight months (July – February) 2021/22 against a surplus of $994 million in the corresponding months of the last fiscal year.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs28.09 or 17.83 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs185.63.
At the open market, the buying and selling of the dollar was recorded at Rs186 and Rs187 at 3:30pm PST.