Dollar falls to Rs. 215.49/- at interbank closing on August 12, 2022
On August 12, 2022, in the
interbank foreign currency market, the US dollar plunged by Rs.3.39/- versus
the Pakistani Rupee to Rs.215.49/-.
The rupee strengthened against
the dollar from the previous day's interbank foreign currency market closing of
Rs.218.88/- to Rs.215.49/-. During the last nine trading days, local units
increased by around Rs.24.45/-, or 10.19%.
Currency dealers claimed that the
State Bank of Pakistan's (SBP) strict oversight has reduced the pressure on the
exchange rate. It is important to note that the country's foreign exchange
reserves were severely drained.
By the week ending August 5,
2022, Pakistan's foreign exchange reserves had fallen to a 43-month low of
$13.56 billion. The nation's foreign exchange holdings, which were $14.21
billion on July 29, 2022, decreased by $648 million.
In January 2019, Pakistan's
foreign exchange reserves were estimated to be at $13.597 billion. On August
27, 2021, the country's foreign exchange reserves reached an all-time high of
$27.228 billion. The foreign exchange reserves have decreased by $13.668
billion since that time.
The State Bank of Pakistan (SBP)
efforts, though, may be responsible for the rupee's recent appreciation. On
August 1st, 2022, the State Bank of Pakistan (SBP) started an inspection
against the exchange companies. The SBP shut down four branches of two ECs
(Galaxy Exchange Co. and Al-Hameed International Money Exchange Co.) on August
2, 2022, for breaking SBP rules.
Additionally, the central bank
recently assessed financial fines to some ECs. Additionally, 13 franchise
agreements have recently been cancelled by six separate ECs owing to SBP
directive violations.
After receiving confirmation from
the International Monetary Fund (IMF) that Pakistan had complied with all
requirements for the release of a $1.2 billion tranche under the Extended Fund
Facility, the dealers stated (EFF).
The rupee was supported,
according to currency analysts, by a decrease in the trade deficit in the first
month of the current fiscal year.
When compared to the $3.23
billion deficit for the same month in the previous year, the trade deficit
shrunk by 18.33% to $2.62 billion in July 2022.
The decrease in import spending
of 12.8% during the reviewed month was a major factor in the reduction of the
trade imbalance. In July 2022, the nation's import bill dropped to $4.86
billion from $5.57 billion in the same month of the previous year.
