The greenback depreciated 0.16% in the interbank market
The Pakistani rupee has finally resuscitated itself against the US dollar in the interbank market after hitting an all-time low of Rs176.77 on December 3. Dollar’s winning streak against the rupee halted Monday morning.
The greenback depreciated by 0.16% and closed at Rs176.48, according to data shared by the State Bank of Pakistan. The local currency recorded an increase of 29 paisas.
Experts pegged the development to the $3 billion loan package that Pakistan received from Saudi Arabia on Saturday. The amount has been deposited with the central bank, increasing the country’s foreign exchange reserves.
Last week, the treasury currency jumped to an all-time high in Pakistan after having an increase of Rs1.29 in the last two trading sessions. Economists blamed the widening trade deficit for the downfall.
In the open market, the dollar decreased by Re1 and traded at Rs177.70.
Here are the open market rates of major currencies on December 6, 2021:
The greenback reached an all-time high of Rs178.70. It recorded a total increase of Rs2.2 over two days.
On November 26, Pakistan’s foreign exchange reserves decreased by $27.5million leaving SBP and commercial banks with $22.5 billion in reserves. Out of this, $6.49 billion are held by commercial banks.
The decline in reserves was primarily because of the repayment of the country’s debts. This put the external account under pressure and widened the current account deficit.
The aid from Saudi Arabia has now increased the central bank’s reserves by $3 billion.
The International Monetary Fund has agreed to provide Pakistan a $6 billion loan which, too, has impacted the dollar rate in the country.
Pakistan is expected to receive the next tranche of Rs1.59 billion by the end of January after approval from IMF’s executive board. This will increase the reserves as well as the value of the rupee.
The new tranche will increase Pakistan’s total debt to $3.27 billion.