KARACHI: The Pakistani rupee fell for the third consecutive session against the dollar on Tuesday, amid depleting foreign exchange reserves and a lack of inflows to stabilise the local economy, dealers said.
The exchange rate shed 22 paisas against the dollar to reach Rs221.91 from the previous day’s closing of Rs221.69 in the interbank foreign exchange market.
Currency experts attributed the narrowing foreign exchange reserves to the continuous decline in the value of the local unit. The lack of inflows from friendly countries and multilateral lending institutions was said to be another major reason for a fall in the local unit.
The foreign exchange reserves of the State Bank of Pakistan (SBP) declined $956 million to reach $7.95 billion during the week ended on November 4, compared with $8.91 billion on October 28.
The central bank attributed the decrease in the reserves to external debt servicing. “Major external debt repayments executed during the week include repayment of government commercial loans,” the SBP said.
“Refinancing of these loans is in process, which will improve the foreign exchange reserves in the coming weeks,” it added.
The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13.72 billion. The net reserves held by banks amounted to $5.76 billion.
The SBP implemented measures to reduce market volatility, lowering the cash-carrying limits for passengers and lowering the annual dollar limitation for debit and credit card transactions, which supported the local currency to make some gains.
However, with the declining reserves and a significant decline in the worker remittances, the rupee failed to sustain the upward momentum in the interbank market.
The workers remittances have also declined 15.7 per cent to reach $2.21 billion in October, compared with $2.62 billion in the same month of the last year.
On a monthly basis, the remittances witnessed a decline of 9 per cent, compared with $2.43 billion received during September.
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 Rs17.06 or 8.32 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs221.91.
At the open market, the buying and selling of the dollar was recorded at Rs225.5 and Rs227.75 at 4:30pm PST.
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