Rupee continues to recover against dollar

KARACHI: The rupee continued its sharp recovery against the dollar and made a gain of Rs1.04 on Friday.

The exchange rate ended at Rs174.48 against the greenback from the previous day’s closing of Rs175.52 in the interbank foreign exchange market.

The rupee maintained gaining momentum for the last eight consecutive days since reaching Rs176.98 on January 26, 2022. During this period, the local currency gained Rs2.5, or 1.41 per cent, against the greenback.

Experts said there were multiple reasons for the recovery in the local currency, which included approval of the International Monetary Fund (IMF) tranche, transfer of funds under Sukuks and decline in the import bill for January 2022.

The IMF Executive Board met on February 2, 2022 and approved over $1 billion 6^th tranche of the Extended Fund Facility (EFF) for Pakistan. This will take the total disbursement by the IMF under the EFF programme to $3 billion to Pakistan and will support the foreign exchange reserves of the country.

The foreign exchange reserves of the country deteriorated sharply. Pakistan’s liquid foreign exchange reserves plunged $397 million to $22.085 billion by the week ended January 28, 2022 as against $22.482 billion by the week ended January 21, 2022.

The dealers said the rupee might also get support, as the latest number of import bill had shown a decline over the previous month after imposition of measures introduced through the mini-budget.

The import bill in January 2022 recorded a decline of 22 per cent to $5.9 billion, compared with $7.58 billion in December 2021, according to the data released by the Pakistan Bureau of Statistics.