KARACHI: The Pakistani rupee continued its downward momentum against the dollar on Friday as the country’s economic conditions worsened hitting investors’ confidence, dealers said.

The exchange rate shed 50 paisas against the dollar to reach Rs223.17 from the previous day’s closing of Rs222.67 in the interbank foreign exchange market.

Currency experts attributed the sixth consecutive loss to the rising fear of a default which has grappled the market. Pakistan’s risk of default has sharply risen to 79.33 per cent owing to the current political turmoil and uncertainty surrounding the ninth review of the International Monetary Fund (IMF) bailout package.

The country’s five-year credit-default swaps (CDS) increased to 7,933 bps on November 16, from 7,550 basis points on November 15, constituting a single-day of increase of 383.8 bps. The default risk perception stood at seven per cent in March this year.

The foreign exchange reserves held by the State Bank of Pakistan (SBP) witnessed an increase of $3 million to reach $7.96 billion during the week ended November 11, compared with $7.95 billion on November 4.

The country’s total liquid foreign exchange reserves rose by $75.2 million to clock-in at $13.79 billion as of November 11, up from $13.72 billion during the previous week.

The net foreign exchange reserves held by the commercial banks surged by $72.2 million to $5.83 billion at the end of last week, compared with $5.76 billion a week earlier.

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 textile exports declined 15.2 per cent to reach $1.35 billion in October, compared with $1.6 billion in the corresponding month of the last year.

On a monthly basis, the exports declined 11.1 per cent with a major decline in components including cotton cloth, knitwear, bedwear, towels, and readymade garments.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs18.32 or 8.94 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs223.17.

At the open market, the buying and selling of the dollar was recorded at Rs227.75 and Rs229.95 at 6:45pm PST.

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