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Rupee continues to fall against dollar in interbank market

Rupee continues to fall against dollar in interbank market

Rupee continues to fall against dollar in interbank market

Rupee continues to fall against dollar in interbank market

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KARACHI: The Pakistani rupee’s downward momentum continued against the dollar on Wednesday, as the macroeconomics of the country deteriorated at a faster pace, dealers said.

The exchange rate witnessed a loss of Rs1.17 against the dollar to reach Rs220.88 from the previous day’s closing of Rs219.71 in the interbank foreign exchange market.

Currency experts said that the rupee continued on a downward momentum due to pressure coming from shrinking foreign exchange reserves, a lack of inflows of the greenback besides multiple debt obligations approaching.

The country is in a dire need of inflows to boost the foreign exchange reserves which have been dwindling continuously. The government has so far failed to secure any major funding and investment agreements from multilateral institutions and relief support from friendly countries, they added.

The foreign exchange reserves of the country have declined to an alarmingly low level amid interest and import payments while the government is likely to move for imports of essential items amid destruction caused by the floods.

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The foreign exchange reserves held by the State Bank of Pakistan (SBP) were down $303 million to clock-in at $7.59 billion during the week ended October 7, compared with $7.89 billion on September 30.

The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13.24 billion. The net reserves held by banks amounted to $5.64 billion.
According to the central bank, the drop came due to external debt repayments, which included repayment of a commercial loan and interest payment on Eurobonds.

The workers’ remittances by overseas Pakistanis have slowed down to a four-month low at $2.44 billion in September 2022. The receipts contracted 10.5 per cent in September, compared with the inflows of $2.72 billion in the previous month.

The trade deficit of Pakistan recorded a decline of 21.42 per cent to clock-in at $9.2 billion in the first quarter of the fiscal year 2023, compared with that of $11.7 billion recorded during the same period of fiscal year 2022.

The total imports during the first quarter stood at $16.3 billion, compared with $18.71 billion recorded during the same period of last fiscal year. The exports rose to $7.1 billion, from $6.99 billion in the first quarter of last year.

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The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs16.03 or 7.82 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs220.88.

At the open market, the buying and selling of the dollar was recorded at Rs225.7 and Rs228 at 5:00pm PST.

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