KARACHI: The Pakistani rupee gained 46 paisas to reach Rs238.38 against the dollar on Tuesday as positive sentiments prevailed after the government officials’ assurance.
The local unit gained 46 paisas to close at Rs238.38 to the dollar from Monday’s closing of Rs238.84 in the interbank foreign exchange market.
Analysts attributed the latest gains in the rupee to the reports regarding the Army Chief’s call to the US state officials for their cooperation in the disbursement of the funds from the IMF.
Additionally, the finance ministry and the State Bank of Pakistan (SBP) on Sunday issued a joint press release about the government’s strategy for fiscal year 2022/23.
The statement expressed hope for the revival of the IMF programme which is of much significance to provide a boost to the investors’ confidence. The resumption of the programme is also likely to pave the way for Pakistan to attract funds from other multilateral lender institutions and friendly countries, the analysts added.
The SBP and the ministry of finance in a joint statement said the rupee was “fully expected to appreciate” in line with a reduced current account deficit and improved sentiment.
A threat to the stability in the value of the local currency will remain until Pakistan secures funds from multilateral lenders and friendly countries to boost its foreign exchange reserves.
The foreign currency reserves held by the SBP recorded a decline of $754 million to clock-in at $8.57 billion during the week ended on July 22, compared with $9.32 billion on July 15. According to the central bank, the decrease came due to external debt and other payments.
The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14.41 billion. The net reserves held by banks amounted to $5.83 billion.
The current account deficit remains one of the key challenges for the stability of the rupee, as after moderating in the previous three months, it rose to $1.4 billion in May, on the back of lower exports and remittances partly due to the Eid holiday.
The trade deficit rose to $4.8 billion in June, more than $1.7 billion higher than its February low. While non-energy imports have continued to moderate in the last three months on the back of curtailment measures by the government and the SBP.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs33.53 or 16.36 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs238.38.
At the open market, the buying and selling of the dollar was recorded at Rs239 and Rs241 at 3:45pm PST.
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