Pakistani rupee struggled against the US dollar on Friday and shed 48 paisas (-o.27 percent) in the interbank market.According to the State Bank of Pakistan, the dollar opened at Rs174.98 and closed at Rs175.46. During the session, the dollar hit as high as Rs176.7 in the intraday trade. Within the open market, the rupee was traded at 177/178 per dollar.
Overall, the local currency shed 22 paisas against the greenback during this week. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs18.04 and Rs15.29 in the current year 2021.
The foreign exchange reserves of the SBP decreased by $691 million (-4.07 percent) to $16,254.1 million in the week ending November 19, compared to $16,945.4 in the previous week. According to the central bank, the decline was witnessed mainly due to external debt repayment. Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $22,773.8 million. Net reserves held by other banks amounted to $6,519.7 million.
Minister for Information Fawad Chaudhary tweeted on Thursday that all legal formalities have been settled in the transfer of $3 billion from Saudi Arabia and the government will receive a deposit of said amount in the next week. These inflows are likely to ease off some of the pressure on the rupee. The Saudi government pledged $3 billion as cash transfer to Pakistan for assisting in the balance of payment.
Meanwhile, the government is reportedly planning to issue a $1bn Sukuk next week in order to bolster its foreign exchange reserves that might keep the dollar’s gain against the rupee in check.
According to currency experts, the rupee remained under pressure against the foreign currency due to a decrease in foreign exchange reserves of the country. Moreover, rising import bill as well as current account deficit is also driving the rupee on a downward trajectory. The previous highest level of dollar of Rs175.73 was recorded on November 12, 2021.
Kamran Nazir Malik is a law graduate and master in Economics. He is associated with TLTP News Wire Service as correspondent since 2018.