Rupee eases against dollar on shrinking forex reserves

KARACHI: The rupee eased by 63 paisas against the dollar on Tuesday, owing to shrinking foreign exchange reserves, dealers said.
The rupee closed at Rs262.51 against the greenback from the previous day’s closing of Rs261.88 in the interbank foreign exchange market.

The dealers said a delay in the International Monetary Fund (IMF) programme, despite measures taken by the government and falling foreign exchange reserves, kept the rupee under pressure.

The import and corporate demand for the dollar also depressed the local currency, they added.

During the last few days, the local currency has made significant recovery, as the government had met almost all the IMF conditions for continuation of the loan programme under the Extended Fund Facility (EFF).

The official foreign exchange reserves of the central bank stood at $3.192 billion by the week ended February 10, 2023. The current level of the official foreign exchange reserves are only to provide import cover for around two weeks or 19 days.

However, the import bill for January 2023 has been recorded at $4.856 billion, as per the Pakistan Bureau of Statistics (PBS).

The benchmark foreign exchange reserves of a central bank should be at a level to provide three months of import cover.

The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell sharply to an almost nine-year low. Previously, the official reserves of the SBP were at $3.19 billion in February 2014.

The foreign exchange reserves held by the central bank witnessed a record high of $20.146 billion by the week ended August 27, 2021. Since then, these have dropped by $16.954 billion.

Also Read

Rupee recovers to Rs265.38 against dollar

KARACHI: The rupee recovered another Rs1.96 against the dollar on Wednesday, as...