KARACHI: The US dollar decreased by 15 paisas to end the interbank foreign currency market on Thursday at Rs218.60 when compared to the Pakistani Rupee (PKR).
The currency rate increased by 15 paisas in rupee value to close at Rs218.60 versus the dollar from the previous day’s interbank foreign exchange market closing of Rs218.75.
According to currency analysts, the rupee appreciated versus the dollar as a result of IMF (International Monetary Fund) contributions under the Extended Fund Facility totaling $1.16 billion (EFF).
A day earlier, the State Bank of Pakistan (SBP) announced that it had received the funds from the IMF. The IMF’s executive board finished Pakistan’s seventh and eighth reviews on August 29, 2022.
This will take total disbursement by IMF under the EFF program to $3.9 billion to Pakistan and will help support foreign exchange reserves of the country.
The rupee fell to the historic low of Rs239.94 against the dollar on July 28, 2022.
The currency market witnessed a non-stop depreciation in rupee value since the government lifted the ban on import of luxury and non-essential items. Besides, the prices of international oil are also seeing a rising trend.
The government on August 20, 2022 withdrew the ban on import of luxury and non-essential items. The government on May 19, 2022 imposed this ban in the wake of massive depreciation in rupee value and significant depletion of foreign exchange reserves.
The rupee witnessed a continuous decline against the dollar since the government lifted the ban. The local currency depreciated continuously during the week (August 22 – August 26) and fell Rs6.01 or 2.8 per cent during the period.
The currency experts said that the vertical decline in foreign exchange reserves also put pressure on rupee value.
By the week ending August 19, 2022, Pakistan’s foreign exchange reserves had decreased by $91 million to $13.522 billion. On August 12, 2022, the country’s foreign exchange reserves were $13.613 billion.
On August 27, 2021, the nation’s foreign exchange reserves reached an all-time high of $27.228 billion. The foreign exchange reserves have decreased by $13.703 billion since that time.
By the week ending August 19, 2022, the State Bank’s official foreign exchange reserves had decreased by $87 million to $7.81 billion from $7.897 billion the previous week.
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since then the official reserves of the SBP declined by $12.336 billion.