• The exchange rate witnessed a gain of 24 paisas against the dollar to reach Rs220.65.
• Currency experts said that the local currency continued to strengthen against the greenback.
• 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.

KARACHI: The Pakistani rupee extended gains for the second consecutive session on Tuesday; following improved investors’ sentiments after Finance Minister Ishaq Dar met key stakeholders to stabilise the local unit, dealers said.

The exchange rate witnessed a gain of 24 paisas against the dollar to reach Rs220.65 from the previous day’s closing of Rs220.89 in the interbank foreign exchange market.

Currency experts said that the local currency continued to strengthen against the greenback after Finance Minister Ishaq Dar held meetings with commercial banks and exchange companies’ officials.

Dar asked the banks and exchange companies to avoid manipulation of the dollar, while he assured ample liquidity in the market, they added.

The finance minister on Monday, announced the government’s decision to increase the threshold of letters of credits (LCs) payments from $50,000 to $100,000.

The government has also decided to keep the prices of petroleum products unchanged for the first half of November 2022 besides extending the last date for filing of tax returns.

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 Rs15.8 or 7.71 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs220.65.

At the open market, the buying and selling of the dollar was recorded at Rs224.5 and Rs226.5 at 4:30pm PST.