KARACHI: The rupee continued its downward momentum, as it depreciated to Rs220.66 against the dollar on the back of shrinking foreign exchange reserves of the country, dealers said.
The local unit shed Rs1.25 to close at Rs220.66 against the greenback from Thursday’s closing of Rs219.41 in the interbank foreign exchange market.
Experts attributed the rupee decline to the continuous fall in the foreign exchange reserves, besides increasing the demand for the foreign currency for import payments.
The foreign exchange reserves of the country took a dip as the reserves held by the State Bank of Pakistan (SBP) fell $87 million, to clock-in at an alarming level of $7.81 billion as of August 19.
The total liquid foreign reserves held by the country stood at $13.52 billion. The net foreign reserves held by commercial banks amounted to $5.71 billion.
The pressure on the rupee has been increasing gradually as the government announced lifting the ban imposed on the imports of luxury and non-essential items, in order to meet the final requirement of the International Monetary Fund.
The market witnessed shortage of foreign currency, particularly the UAE dirham, after Dubai authorities made it essential for Pakistanis to have 5,000 dirhams when landing at Dubai airport.
Although the country is all set to receive $1.17 billion from the IMF along with investments from friendly countries, the exchange rate remained under pressure as these developments failed to provide stability to the local unit.
The IMF executive board is scheduled to meet on August 29, for approving the release of a loan tranche of $1.17 billion for Pakistan.
The Qatar Investment Authority (QIA) has announced that it aims to spend $3 billion on various commercial and investment sectors in Pakistan.
Saudi Arabia will also invest $1 billion in Pakistan as part of its plan to help revive the country’s economy that has been suffering from one crisis to another.
The country’s current account deficit rose 531 per cent to over $17 billion during the fiscal year 2022 due to massive increase in goods import bill. Overall, the current account deficit was $17.4 billion during the fiscal year 2022, compared with $2.8 billion in the fiscal year 2021, depicting an increase of $14.6 billion.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs15.81 or 7.71 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs220.66.
At the open market, the buying and selling of the dollar was recorded at Rs228 and Rs230 at 4:45pm PST.
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