Daily Times

Pakistani rupee strengthened by 5 paisa (+0.03 percent) against the US dollar for the second straight session on Monday.

The State Bank of Pakistan said in a statement that the dollar opened at Rs176.77 in the interbank market and closed at Rs176.72. The rupee witnessed a trading range of 15 paisa during the session, showing the intraday high bid of 176.75 and low offer of 176.60. Within the open market, the rupee was traded at 177.80/178.80 per dollar.

Overall Pakistan rupee shed 53 paisa against the US dollar during the last week, while it has depreciated by 21 paisa during the current year 2022. The local unit has devalued by Rs19.29 during the ongoing fiscal year 2021-22.

The main reason behind the recovery of rupee against the dollar was passage of the State Bank of Pakistan (Amendment) Bill 2021 from the Senate on Friday last. The bill passage is one of the conditions for the revival of the International Monetary Fund (IMF) programme for the $6 billion extended fund facility (EFF). The IMF will discuss Pakistan’s case on February 2.

The currency dealers were of the view that approval of the State Bank of Pakistan (Amendment) Bill 2021 from the Senate will ensure clearance of Pakistan’s sixth review by the IMF’s executive board. They said the fall in the foreign exchange reserves adversely dented the rupee stability earlier in the day; however, the rupee managed to close in the green. They said the gradual increase in international oil prices may bring the rupee under pressure.

The SBP said last week that foreign exchange reserves of the country dropped for the seventh successive week by $868 million (3.7 percent) to reach $22.48 billion. The foreign exchange reserves during the week ended January 21, 2022 reached $22.48 billion from $23.35 billion due to external debt and other payments.

As per the central bank data, the reserves held by the central bank during the week decreased by $846 million (4.96 percent) on a week-on-week basis to $16.19 billion. Similarly, the reserves of commercial banks dropped slightly by $22 million (0.3 percent) to $6.29 billion from $6.3 billion on a week-on-week basis.