The Pakistani rupee (PKR) fell as low as 176.7 against the US Dollar (USD) during an intraday trade on Friday in an interbank market owing to the foreign exchange reserves held by the country plunging to an eight-month low at $22.77 billion during the week which ended on November 19, 2021, crushing the traders’ sentiments.
The local currency has dipped by 1.58 rupees (10:57 PST) in comparison to the previous day’s closing at 174.98 against the greenback.
In the open market, the USD was traded at 177.50/179.00.
It must be noted that the SBP reserves lowered by $691 million to US$ 16.254bn, primarily owing to external debt repayment.
Talking about the decline in reserves, Treasury Head at Chase Manhattan Bank Asad Rizvi said, “The drop since August is worrisome. Early $3bn loan from Saudi Arabia may help, but will not be enough to attain crucial $20bn number unless IMF funding is released earlier, as higher imports will add pressure on forex reserves and PKR.”
Earlier on Thursday, the information minister Fawad Chaudhary took to Twitter and said that all legal formalities had been worked out regarding the transfer of $3bn from Saudi Arabia and the government will receive a deposit of the amount within next week. These inflows are expected to ease off some of the pressure on the rupee.
Additionally, media sources reported that the government is also planning to issue a $1bn Sukuk next week for the purpose of bolstering its forex reserves that might help curtail the USD’s gain against the rupee.