Rupee records marginal gain against dollar

KARACHI: The Pakistani rupee remained flat witnessing a marginal gain of 8 paisas to reach Rs213.90 against the dollar on Tuesday amid strengthening dollar against major global currencies.

The local unit gained 8 paisas to close at Rs213.90 to the dollar from Monday’s closing of Rs213.98 in the interbank foreign exchange market.

Currency experts said that the rupee has maintained its grounds against the dollar despite the greenback reigning against major currencies amid concerns over global economic slowdown.

The greenback hovered near a one-week high on Tuesday, while major currencies remained under pressure as weak global economic data regnited recession fears.

The local unit has been on a continuous upward stream amid positive news regarding the resumption of the IMF programme, which is likely to disburse $1.17 billion under the Extended Fund Facility (EFF) programme.

Additionally, Saudi Arabia is also reported to renew its $3 billion deposit in assistance to Pakistan which further boosted the investors’ confidence.

The government has also signed the Letter of Intent (LoI) that it received from the IMF last week for the activation of the lender’s bailout programme.

The country’s current account deficit has also narrowed during July on the back of lower import bill. The trade deficit came in at $2.64 billion in July, down 47 per cent or $2.32 billion on a month-on-month basis.

The resumption of the IMF programme is also likely to pave the way for Pakistan to attract funds from other multilateral lender institutions and friendly countries to provide stability to the value of rupee.

However, the foreign exchange reserves of the country are on a constant decline amid debt servicing and debt payments. The foreign currency reserves held by the State Bank of Pakistan (SBP) recorded a decline of $555 million to clock-in at $7.83 billion during the week ended on August 5, compared with $8.38 billion on July 29.

The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13.56 billion. The net reserves held by banks amounted to $5.73 billion.

The country’s current account deficit rose 531 per cent to over $17 billion during the fiscal year 2022 due to massive increase in goods import bill. Overall, the current account deficit was $17.4 billion during the fiscal year 2022, compared with $2.8 billion in the fiscal year 2021, depicting an increase of $14.6 billion.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs9.05 or 4.41 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs213.90.

At the open market, the buying and selling of the dollar was recorded at Rs207.75 and Rs211.75 at 3:30pm PST.

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