KARACHI: The Pakistani rupee gained 8 paisas against the dollar to reach Rs207.91 on Thursday amid a likely hike in the key policy rate in the upcoming monetary policy meeting.
The local unit gained 8 paisas to close at Rs207.91 to the dollar from Tuesday’s closing of Rs207.99 in the interbank foreign exchange market.
Currency experts said that the local unit recorded marginal growth against the greenback as the investors expect the State Bank of Pakistan (SBP) to raise the policy rate in order to curb demand and provide some respite to the local currency.
The central bank is expected to raise the key policy rate by 100bps to 150bps at its review today, as it attempts to tackle 13-year high retail inflation after the federal government unveiled the budget for fiscal year 2022/23 last month.
Likewise, the global oil prices dropped in a volatile trade earlier, extending losses as investors grew more worried that energy demand would slide further in a potential global recession.
Brent crude was trading at $100.83 a barrel on Thursday while WTI crude was recorded at $98.74 a barrel.
The government is also awaiting the revival of the International Monetary Fund (IMF) programme for the disbursement of around $2 billion to boost the country’s foreign exchange reserves.
The foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $10.30 billion during the week ended on June 24, up $2.07 billion compared with $8.23 on June 17.
Likewise, the overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $16.19 billion while the net reserves held by banks amounted to $5.88 billion.
Pakistan’s trade deficit showed a sharp growth to $3.64 billion in March 2022, registering an increase of 12 per cent over the same month of the last fiscal.
The total trade deficit escalated to $35.52 billion in the first nine months (July-March) period of the current fiscal year against $20.8 billion in the same period last fiscal year.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs50.37 or 31.97 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs207.91.
At the open market, the buying and selling of the dollar was recorded at Rs206 and Rs 209.5 at 4:30 pm PST.
