KARACHI
Pakistani rupee turned around against the US dollar and appreciated by Rs13.85 (+4.63 percent) on Friday, following political temperature going down in the country.
The State Bank of Pakistan said in a statement that the dollar opened at Rs298.93 in the interbank market and closed at Rs285.08. Within the open market, the rupee was traded at 289/292 per dollar against 304/299 a dollar a session earlier.
Experts believe the dramatic surge in rupee was witnessed after investors received positive cues from the political front, following the Supreme Court’s ruling declaring the arrest of Imran Khan as illegal, and the end of violent protests across the country.
Furthermore, Finance Minister Ishaq Dar’s reassurance that Pakistan would fulfil external obligations timely, with or without the International Monetary Fund (IMF), helped pacify markets.
Dar revealed that there is a plan for foreign payments of $3.7 billion in May and June, and the country would not default. He expressed hopes that China will also rollover a $2.4 billion loan for Pakistan, whereas, the budget will be presented on June 9.
The local currency shed around 5 percent against the US dollar in the previous two sessions, as the country had been suffering from a law and order situation since the arrest of former prime minister Imran Khan on Tuesday last. Khan’s arrest sparked nationwide protests and drew criticism from political parties. The resulting political turmoil had a detrimental impact on investor confidence and the rupee’s value.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs79.21 against the US dollar in the interbank, while it plummeted by Rs58.65 against the greenback in the current year.
In a related development, the foreign exchange reserves held by the SBP decreased by $74 million (-1.65 percent) on a week-on-week basis to $4.38 billion during the week ended on May 05, 2023. Similarly, the country’s total reserves decreased by $52.8 million (-0.52 percent) to $9.99 billion. On the other hand, the reserves held by commercial banks moved up by $21 million (+0.37 percent) to $5.60 billion.
