KARACHI: The Pakistani rupee gained against the dollar on Monday, as the investors’ confidence was boosted; following Finance Minister Ishaq Dar’s meeting with the central bank officials and exchange companies, dealers said.
The exchange rate witnessed a gain of Rs1.58 against the dollar to reach Rs220.89 from Friday’s closing of Rs222.47 in the interbank foreign exchange market.
Currency experts said that the local unit reversed the downward trend after Finance Minister Ishaq Dar on Saturday, held a meeting with the commercial banks’ officials and other market participants.
During the meeting, Dar warned of strict action against those institutions, who will be found involved in unlawful practices. The finance minister asked banks and exchange companies to avoid manipulation of the dollar, they added.
The market participants celebrated the meeting as the finance minister reaffirmed that the dollar will be devalued to below Rs200. He assured that the government was fully able to meet its obligations under domestic and foreign debt.
On the flip side, the foreign exchange reserves are on a constant decline as the official foreign exchange reserves of the SBP fell $157 million to $7.44 billion by the week ended October 21, compared with $7.59 billion a week ago.
The central bank attributed the decline to external debt repayments. The SBP said it had received $1.5 billion from the Asian Development Bank (ADB) in value on October 26. These proceeds will be reflected in the SBP reserves for the week ending October 28.
The total foreign exchange reserves of the country fell $89 million to $13.16 billion by the week ended October 21, compared with $13.25 billion a week ago.
The foreign exchange held by the commercial banks witnessed an increase of $68 million to $5.72 billion by the week ended October 21, as against $5.654 billion on October 14.
Pakistan’s current account deficit shrank more than 37 per cent on a year-on-year basis during the first quarter of the fiscal year 2023.
During the first three months of the fiscal year 2023, the current account deficit of Pakistan amounted to $2.2 billion, compared with $3.52 billion recorded during the same period last year, according to a monthly report published by the central bank.
The trade deficit in services narrowed by 26.22 per cent on a year-on-year basis to clock-in at $647 million in the first quarter of the fiscal year 2022/23, from a deficit of $877 million recorded in the same period of last fiscal year.
Similarly, the deficit has shrunk by 24 per cent on a monthly basis and 14.85 per cent on a yearly basis to stand at $172 million in September, compared with $227 million in August and $202 million in the same month of last fiscal year.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs16.04 or 7.83 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs220.89.
At the open market, the buying and selling of the dollar was recorded at Rs225.5 and Rs228 at 3:45pm PST.
[embedpost slug=”/rupee-declines-for-second-consecutive-session/”]
