Rupee closes flat against dollar

KARACHI: The Pakistani rupee recorded marginal gains against the dollar on Friday after remaining volatile on the back of political instability and deteriorating macroeconomics of the country, dealers said.

The exchange rate gained 3 paisas against the dollar to reach Rs221.92 from the previous day’s closing of Rs221.95 in the interbank foreign exchange market.

Currency experts said that the local unit remained flat as the investors’ sentiments dampened over the increasing noise in the domestic political uncertainty besides a lack of dollar inflows.

The local currency has remained under pressure during the outgoing week owing to reduced inflows, while the government has also failed to secure any major loan or financing agreement from friendly countries and multilateral institutions.

The State Bank of Pakistan (SBP) officials, after meeting with key stakeholders, allowed the exchange companies to trade 20 per cent of remittances in the open market to ease pressure on the rupee.

Earlier, these firms were surrendering 100 per cent of workers’ remittances in the interbank market. The exchange firms bring home remittances with the help of money transfer operators in their accounts maintained with banks in the country.

The foreign exchange reserves of the SBP recorded an increase of $1.5 billion during last week due to the arrival of inflows from Asian Development Bank (ADB).

The central bank’s reserves clocked-in at $8.91 billion during the week ended on October 28, compared with $ 7.44 billion on October 21, 2022. This increase is attributed to the receipt of $1.5 billion from the ADB.

The net foreign exchange reserves held by the commercial banks also witnessed an increase of $44 million to reach $5.76 billion during the week ended October 28. The total liquid foreign reserves held by the country stood at $14.67 billion as of October 28, up from $13.162 billion a week earlier.

The country’s services trade deficit slashed by over 26 per cent to 647.4 million during the first quarter of the fiscal year 2023, as against $877.3 million recorded in the same period last fiscal.

The services exports increased 4.63 per cent to $1.695 billion, and imports were down 6.2 per cent to $2.34 billion, depicting a deficit of $647.4 million.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs17.07 or 8.33 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs221.92.

At the open market, the buying and selling of the dollar was recorded at Rs225.4 and Rs227.7 at 5:00pm PST.

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