• The exchange rate shed 20 pasias to reach Rs224.11, against the previous day’s closing of Rs223.91.
• Currency experts attributed the worsening conditions of the economy to the depreciation in the local unit.
• Pakistan needs foreign inflows on an urgent basis to avoid a balance of payment crisis.

KARACHI: The Pakistani rupee maintained the downward momentum on Tuesday, owing to intensified economic pressure, besides a lack of dollar inflows, dealers said.

The exchange rate shed 20 pasias to reach Rs224.11, against the previous day’s closing of Rs223.91 against the dollar in the interbank foreign exchange market.

Currency experts attributed the worsening conditions of the economy to the depreciation in the value of the local unit. Besides, the market witnessed increased demand for the greenback for import payment which added to the pressure on the local unit, they added.

Earlier, the market sentiments took a hit after Finance Minister Ishaq Dar said that he would not beg the IMF for providing loans to Pakistan and that he has told the lender’s officials that “you cannot dictate; if the money does not come in, we will manage”, he said.

Pakistan needs foreign inflows on an urgent basis to avoid a balance of payment crisis. The country’s foreign exchange reserves fell sharply during the last few months making it difficult for the government to fulfill its foreign repayment commitments.

The foreign exchange reserves held by the State Bank of Pakistan fell $134 million to reach $7.82 billion during the week ended November 18, compared with $7.95 billion on November 11.

According to the central bank, the decrease in reserves came due to external debt repayment.

The overall liquid foreign currency reserves held by the country, including the net reserves held by banks other than the SBP, stood at $13.64 billion, while the net reserves held by banks amounted to $5.81 billion.

The net foreign direct investment (FDI) in Pakistan slumped 62 percent to $95 million in October 2022, compared with $247.3 million in the same month last year. However, the net FDI was up 13 percent, compared with $84 million recorded in September 2022.

During the first four months of fiscal year 2023, the net FDI dropped 52 per cent year-on-year to $348 million, compared with $726 million during the same period of last fiscal year.

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 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 Rs19.26 or 9.40 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs224.11.

At the open market, the buying and selling of the dollar was recorded at Rs229.25 and Rs231.4 at 5:00pm PST.

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