KARACHI: The Pakistani rupee showed recovery against the dollar on Thursday, as the market expect latest inflows from foreign institutions to boost the foreign exchange reserves, dealers said.
The exchange rate gained 23 paisas against the dollar to reach Rs221.42 from Tuesday’s closing of Rs221.65 in the interbank foreign exchange market.
Currency experts said that the local unit continued its upward momentum after Finance Minister Ishaq Dar said that the State Bank of Pakistan (SBP) would receive $500 million from the Asian Infrastructure Investment Bank (AIIB) within this month, another boost to Pakistan’s foreign exchange reserves.
In a major development, the federal government has decided to withdraw the SBP and the National Bank of Pakistan (NBP)’s appeals from the Supreme Court against Sharia court with respect to making the economy interest-free in the next five years, they added.
On the global front, oil prices extended losses on Thursday for a fourth consecutive session as renewed Covid-19 curbs in China raised concern about fuel demand in the world’s biggest crude importer.
Brent crude was down 68 cents, or 0.7 per cent, to $91.97/barrel, while the US West Texas Intermediate (WTI) crude fell $1.07, or 1.3 per cent, to reach $84.76/barrel.
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.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs16.57 or 8.08 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs221.42.
At the open market, the buying and selling of the dollar was recorded at Rs225.4 and Rs225.6 at 4:45pm PST.
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