The Pakistani currency continued to remain under pressure on the fifth consecutive working day, as it lost 0.57% or Rs1.25 on day-to-day basis, bringing it down to Rs220.66 against the US dollar in the interbank market on Friday.
The rupee had closed at Rs219.41 on Thursday, according to the Central Bank. With the latest drop, the domestic currency has dropped a cumulative of 2.78% or Rs6 in the past five working days. The country’s foreign exchange reserves dropped by $87 million to $7.81 billion the week ending on August 19, 2022. The continuous drop in reserves has reduced the country’s import capacity to less than six-weeks at present, compared to the usual three-month.
The International Monetary Fund (IMF) executive board is scheduled to meet on Monday to consider approving the release of its next loan tranche of $1.2 billion to Pakistan. The reserves have dropped by around $8 billion in the past seven to eight months due to increased import payments and scheduled foreign debt repayments.
The currency also faced mounted pressure on reports that the United Arab Emirates (UAE) would not provide bilateral assistance worth $2 billion in cash. Instead, it would invest $3 billion by acquiring different assets in Pakistan over a period of time. Moreover, leading commercial banks are reporting a slowdown in inflows of workers’ remittances sent from overseas Pakistanis after inflation readings hit multi-decade highs in the US and Europe resulting in fear of recession in the West, experts said.
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