The Pakistani rupee (PKR) broke its 5-day losing streak as it recovered by 1.1 rupees during the intraday trade reaching PKR 174.63 against the greenback owing to a decent increase in workers’ remittances.
According to data from the State Bank of Pakistan (SBP), inward workers’ remittances have continued their streak of strong growth during the month of October as inflows soared by 10% year-on-year to $2.5 billion.
The SBP posted on Twitter, “At $2.5bn in October 2021, remittances continue their strong streak, rising by 10% from October 2020 and only moderating marginally compared to September 21. Cumulatively, they have risen to $10.6bn so far in FY22, up 12% over the same period last year”.
Meanwhile, the central bank has increased Cash Reserve Requirement (CRR) for the purpose of moderating money supply growth as well as domestic demand.
The average CRR to be preserved within two weeks by scheduled banks has been raised from 5% to 6% while the minimum CRR to be maintained every day has been increased from 3% to 4%.
Talking about this move by the central bank, the former Treasury Head at Chase Manhattan tweeted, “The focus of Interbank Market will be on Hike of CRR to 6%.”
He continued, “Roughly Rs 175 billion is expected to be drained out of the system”.