Dollar falls opposed to Rupee for fifth session

• The Pakistani rupee appreciated versus the US dollar in the interbank market on Thursday.
• The rupee gained 2.65 or 1.17 percent, falling from Wednesday’s close of Rs228.80 to 226.15.
• The dollar dropped by 9.8 or 4.19 percent the previous day.

For the fifth session in a row, the Pakistani rupee appreciated versus the US dollar in the interbank market on Thursday.

In comparison to the dollar, the rupee gained 2.65 or 1.17 percent, falling from Wednesday’s close of Rs228.80 to 226.15. The dollar dropped by 9.8 or 4.19 percent the previous day, which led to a substantial increase in the rupee.

Malik Bostan, the chairman of the Exchange Companies Association of Pakistan (ECAP), said that the previous administration’s promises would take time to fulfill.

However, this time, just a few days after Finance Minister Miftah Ismail stated that Pakistan’s import bill would decrease, it actually decreased by $2 billion.

According to data from the Pakistan Bureau of Statistics (PBS), imports have decreased by 38.3 percent over the past month as a result of the government’s decision to ban a variety of luxury goods in order to address the country’s cash deficit.

The decline in imports was accompanied by a decline in exports as well. The trade deficit decreased by 18.3% to $2.64 billion in July 2022 from $3.235 billion in July 2021, easing pressure on the currency. The shortfall was $4.96 billion in June 2022.

In addition, to hastily revive the IMF loan scheme, Chief of Staff Army (COAS) General Qamar Javed Bajwa recently called US Deputy Secretary of State Wendy Sherman.

Bostan claimed that immediately after this, the lender declared in a statement that Pakistan had met all requirements for the combined seventh and eighth reviews of the Extended Fund Facility, demonstrating the importance of the army chief’s call.

A board meeting is provisionally scheduled for late August after sufficient finance assurances are secured, according to a statement released on Tuesday by Esther Perez Ruiz, the IMF’s Resident Representative for Pakistan.

The dollar could drop to 180–190 against the Pakistani rupee if the IMF distributes the $1.2 billion later in August, according to Bostan, who also predicted that records will continue to be broken.

“This was the dollar’s actual value. The dollar wasn’t at such highs prior to the nation’s political unrest and the Punjab by-elections, which upended everything, including the markets “said he.

Bostan noted that there had previously been concerns about whether the government would last or not, but following the Election Commission of Pakistan’s ruling on the PTI’s illegal funding, the coalition has chosen to petition the Supreme Court, signaling that it intends to remain in power.

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