The rupee's upward march continued for the sixth consecutive session, as the currency appreciated 0.06% against the US dollar in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the rupee closed at 181.58 after a day-on-day appreciation of 11 paisas, or 0.06%. Last week, the local currency had recorded its biggest increase on a day-to-day basis in the inter-bank market in two years after it closed at 184.68.
In the last six trading sessions, the rupee has appreciated by 3.6%, a remarkable turnaround for a currency that had hit its record low only last week.
“Pak rupee correction likely to continue,” said Asad Rizvi, ex-treasury head at Chase Manhattan, in a tweet.
The expert also expressed concern over the ongoing depletion of the country’s foreign exchange reserves, owing to debt payments, as the import cover continues to diminish.
Rupee continues to enjoy upward ride, appreciates for fifth consecutive session
“SBP's net reserves downward journey continues falling to almost half,” said Asad Rizvi, as compared to the $20.073 billion in August 2021.
“Reserve building is tough due to widening of trade gap,” he said, adding that rising oil prices are a "spoiler". He also said that workers’ remittance is the “best source of capital”.
Remittances: $2.8bn record inflows received in March
Foreign exchange reserves held by the central bank fell another $470 million on a weekly basis to reach a critical $10.85 billion, revealed SBP on Thursday. This is the lowest reserve level since June 2020.
Total liquid foreign reserves held by the country stood at $17.03 billion as of April 8, said the SBP.
The development suggests that the rollover of a major syndicated loan facility from China has not yet happened.
Meanwhile, the central bank remains active in conducting open market operations (OMO), as it injected Rs3.169 trillion worth of liquidity into the money market on Friday.
Inter-bank market rates for dollar on Friday
BID Rs 181.45
OFFER Rs 181.55
Open-market movement
In the open market, the PKR lost 20 paisas for both buying and selling against USD, closing at 181 and 182, respectively.
Against Euro, the PKR gained one rupee for both buying and selling, closing at 195 and 196.50, respectively.
Against UAE Dirham, the PKR gained 60 paisas for buying while losing 30 paisas for selling, closing at 48.10 and 49.50, respectively.
Against Saudi Riyal, the PKR lost 20 paisas for buying and 10 paisas for selling, closing at 48.20 and 48.60, respectively.
Open-market rates for dollar on Friday
BID Rs 181
OFFER Rs 182