The Pakistani rupee maintained an uptick on the second consecutive working day, as it improved 0.25%, or Rs0.71, closing at Rs281.71 against the US dollar in the interbank market on Friday.
The latest gain in the currency is seen after the central bank reported on Thursday that Pakistan’s foreign exchange reserves have continued to enhance for the sixth consecutive week, improving by $18 million in a week to $4.3 billion.
Market talk suggests that although the growth in reserves was nominal, it improved sentiment in the interbank market. A surge in reserves took place following a rise in supply compared to prevailing demand, a high official told The Express Tribune. The central bank is also purchasing the surplus dollars available in the interbank market.
Talks also suggest that overseas Pakistanis have started sending comparatively higher workers’ remittance to their family members, ahead of Ramzan.
On the other hand, demand for dollars for import remained low due to administrative control, as imports cut to half at $4 billion in February, compared to a historical high at $8 billion in a month, in the recent past.
Moreover, on Friday Pakistan received a second funding of $500 million from China after the Industrial and Commercial Bank of China (ICBC) rolled over $1.3 billion financing facility.
Finance Minister Ishaq Dar wrote on his official Twitter handle that the “State Bank of Pakistan (SBP) has received today in its account from Chinese bank ICBC $500 million. It will shore up forex reserves of Pakistan.”
ICBC has lent a total of $1 billion in two tranches over the past couple of weeks, totalling $1.3 billion. In recent weeks another Chinese bank also lent $700 million.
Published in The Express Tribune, March 18th, 2023.
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