US dollar declines against PKR after Pakistan receives funds

KARACHI: The price of the United States dollar (USD) on Tuesday reduced against the Pakistani Rupee (PKR) after the nation received funds from Saudi Arabia.

According to the data issued by the State Bank of Pakistan (SBP), the price of USD decreased by Rs1.23, or 0.44 percent, in interbank trade. The greenback was traded at Rs278.57, compared to Rs278.80 a day earlier.  The dollar traded as high as Rs 281 during interbank trade.

In the open market, the price of the USD dollar declined by one rupee. The currency was being traded at Rs282 as compared to Rs283 a day earlier

In comparison to major currencies, PKR lost 17.68 Paisa against the Euro, closing at 306.7586 compared to the previous value of 306.5818. The British Pound became more expensive by 50.44 Paisa closing at 359.0179 compared to 358.5135 from a day ago.

The Swiss franc saw gains of 1.51 rupees, closing at 316.105 compared to 314.5992 from the previous session. Against the Japanese Yen, PKR lost 1.78 paisa, closing at 1.9825 versus 1.9647 a day ago.

The Chinese Yuan gained 0.47 paisa, closing at 38.6835 against 38.6788 from the previous session. The Saudi Riyal decreased in value by 33.37 Paisa from 76.1777 a day ago to 75.844. The UAE Dirham closed at 74.2639 with a loss of 32.28 paisa from its value of 74.5867 a day ago.

The positivity stemmed from Saudi Arabia’s much-needed support of a $2 billion deposit to the State Bank of Pakistan (SBP). This inflow will help Pakistan’s foreign exchange reserves to increase. As of June 30, 2023, the country’s total reserves stood at $9.75bn.

Federal Minister for Finance and Revenue Ishaq Dar announced that Saudi Arabia has deposited $2 billion with State Bank of Pakistan (SBP), increasing the total foreign exchange reserves to around $11.7 billion.

He said this would be a straightaway increase in the country’s foreign exchange reserves. He added the new position of exchange reserves would be reflected from next week.

It is pertinent to mention here that the Fitch Ratings has upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘CCC, indicating a positive development towards the betterment of the country’s economy

The rating agency identified key indicators that contributed to the positive development rating for the country which include improvement in easing external financing risks.

The upgrade in ratings reflects Pakistan’s improved external liquidity and funding conditions following its Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) on a nine-month Stand-by Arrangement (SBA) in June.