Karachi October 18 2022: Pakistan Rupee falls for the fifth consecutive day in interbank trading against dollar as government start opening LCs and gap widen of spread with open market rate despite dollar lost ground against major currencies.
However, this time the pace of Rupee fall is much lower than earlier depreciations as Pakistan Rupee has fallen PKR 1.01 or 0.46 percent in last four sessions.
The Rupee start depreciating since government start clearing pending payments of letters of credit (LCs) worth $50,000.Finance Minister Ishaq dar said that “A total of 7,952 cases were pending and after these decisions, nearly 4,400 requests of opening LCs will be subtracted”.
Pakistan Rupee depreciate 82 paisa or 0.37 percent in interbank to close at 219.71 against yesterday closing of 218.89.
However, in Open Market Rupee is trading at 226.25 against dollar at PST 16:00, according to Forex Association of Pakistan.
In international market, the dollar lost ground against sterling and other major peers on Tuesday as investor sentiment picked up following the UK's dramatic U-turn over the tax-slashing mini budget that had roiled global markets.
The British pound extended gains following a media report that the Bank of England is set to delay quantitative tightening until bond markets calm. The U.S. dollar index - which measures the greenback against six major peers, including sterling, the euro and the yen - sagged 0.21% to 111.85, the lowest level since Oct. 6.
Pakistan’s new finance minister, Ishaq Dar, told Reuters on Friday that he will seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, but will not pursue haircuts as part of any restructuring. The veteran finance minister said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s external financing needs estimated at about $32 billion after devastating floods.
SBP foreign exchange reserves for the week ending October 7 2022, were decreased by USD 303 million to USD 7,596 million due to external debt repayments, as per data released by the Central Bank. Pakistan reserves witnessed second biggest drop in the year after Argentina during the period according to Bloomberg which track 53 countries foreign exchange reserves number.