KARACHI: The Pakistani rupee recovered against the dollar on Monday after the finance minister announced expected inflows from friendly countries to support the government in overcoming economic challenges, dealers said.
The exchange rate gained 26 paisas against the dollar to reach Rs221.66 from Friday’s closing of Rs221.92 in the interbank foreign exchange market.
Currency experts said that the local unit recorded gains as investors’ celebrated the announcement by Finance Minister Ishaq Dar that Pakistan has secured roughly $13 billion in additional financial support from China and Saudi Arabia.
According to Dar, Pakistan would be getting about $9 billion from China and $4 billion from Saudi on top of assurances for about $20 billion in investments.
However, the political uncertainty has kept the market under pressure where the opposition party announced to resume its long march from November 9, for early elections.
The foreign exchange reserves of the State Bank of Pakistan (SBP) recorded an increase of $1.5 billion during last week due to the arrival of inflows from Asian Development Bank (ADB).
The central bank’s reserves clocked-in at $8.91 billion during the week ended on October 28, compared with $ 7.44 billion on October 21, 2022. This increase is attributed to the receipt of $1.5 billion from the ADB.
The net foreign exchange reserves held by the commercial banks also witnessed an increase of $44 million to reach $5.76 billion during the week ended October 28. The total liquid foreign reserves held by the country stood at $14.67 billion as of October 28, up from $13.162 billion a week earlier.
The country’s services trade deficit slashed by over 26 per cent to 647.4 million during the first quarter of the fiscal year 2023, as against $877.3 million recorded in the same period last fiscal.
The services exports increased 4.63 per cent to $1.695 billion, and imports were down 6.2 per cent to $2.34 billion, depicting a deficit of $647.4 million.
Globally, oil prices fell more than $1/barrel on Monday after Chinese health officials reiterated their commitment to a strict Covid-19 containment strategy over the weekend, dashed hopes for a rebound in oil demand from the world’s leading crude importer.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs16.81 or 8.20 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs221.66.
At the open market, the buying and selling of the dollar was recorded at Rs225.5 and Rs227.75 at 5:00pm PST.
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