KARACHI: The fall in the value of Pakistani rupee continued against the dollar on Thursday owing to deteriorating macroeconomics risking a default besides rising political noise, dealers said.

The exchange rate shed 26 paisas against the dollar to reach Rs222.67 from the previous day’s closing of Rs222.41 in the interbank foreign exchange market.

Currency experts said that the local unit declined for the fifth consecutive session due to a significant decline in the foreign exchange reserves coupled with the default risks and political uncertainty which added pressure to the rupee.

Pakistan’s benchmark 5-year Credit Default Swap (CDS) to a whopping 75.5 per cent, on November 15, owing to uncertainty over the International Monetary Fund’s (IMF) ninth review.

The instrument has widened by over 19.29 percentage points in a single day and shows that investors have panicked amid the country’s foreign exchange reserves depleting by over $10 billion in the past 11 months.

The foreign exchange reserves of the State Bank of Pakistan (SBP) declined $956 million to reach $7.95 billion during the week ended on November 4, compared with $8.91 billion on October 28.

The central bank attributed the decrease in the reserves to external debt servicing. “Major external debt repayments executed during the week include repayment of government commercial loans,” the SBP said.

“Refinancing of these loans is in process, which will improve the foreign exchange reserves in the coming weeks,” it added.

The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13.72 billion. The net reserves held by banks amounted to $5.76 billion.
On the political front, the Pakistan Tehreek-e-Insaf continued its long march toward the capital to achieve the objective of early elections.

Chief Justice of Pakistan Umar Ata Bandial on Thursday dismissed a petition to stop PTI’s march and remarked that it is a political problem that can be solved politically.

The CJP made the remarks during the hearing of a petition filed by Senator Kamran Murtaza against the PTI’s long march.

The workers remittances have also declined 15.7 per cent to reach $2.21 billion in October, compared with $2.62 billion in the same month of the last year.

On a monthly basis, the remittances witnessed a decline of 9 per cent, compared with $2.43 billion received during September.

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 Rs17.82 or 8.69 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs222.67.