Dollar rebounds to PKR 186.75 in interbank

KARACHI: The US dollar rebounded against the Pakistan Rupee (PKR) on Saturday to reach 186.75 in the interbank foreign exchange market.

The local unit lost five paisas against the dollar to end at Rs186.75 from previous day’s closing of Rs186.70 in the interbank foreign exchange market.

READ MORE: Rupee ends 4-day losing streak against dollar

Currency analysts said that advance dollar buying was seen due to weekly holiday next day.

The analysts said that exchange rate was under immense pressure due to falling foreign exchange reserves and mounting dollar demand for import payments.

Although the State Bank of Pakistan (SBP) recently took measures through enhancing policy rate aggressively but all in vain.

READ MORE: Dollar ends near PKR 187 in interbank market

The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low PKR 188.18 to the dollar on the day of monetary policy announcement.

READ MORE: Rupee falls Rs4.37 to dollar in fresh wave

However, following the announcement the rupee rallied for seven straight days and recovered PKR 6.63 against the dollar.

The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

However, Pakistan’s foreign exchange reserves inched up by $17 million to $17.045 billion by week ended April 16, 2022. The foreign exchange reserves of the country were at $17.028 billion a week ago.

READ MORE: Dollar climbs up to Rs184.44 at interbank closing

The official foreign exchange reserves of the State Bank also improved by $36 million to $10.886 billion by the week ended April 16, 2022 as compared with $10.85 billion a week ago.

The foreign exchange held by commercial banks, however, fell by $19 to $6.157 billion by week ended April 16, 2022 as compared with $6.178 billion a week ago.

Pakistan’s foreign exchange reserves have declined by around $10 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.