The Pakistani rupee has maintained its upward trajectory as it is appreciated by 16 paisas against the US dollar in the interbank trading on Friday. According to money market report, the rupee kept up its appreciating mode and gained against the greenback which slid 16 notches down and was trading at Rs283.50. On Thursday, the local unit was appreciated by 26 paisas against the US dollar and ended the day at Rs283.66.

Though the market reposed confidence in rupee, however, the lack of inflows kept the local currency under pressure. As of the week ending on March 24, 2023, Pakistan’s foreign exchange reserves have dropped to $9.816 billion, marking a $323 million decline compared to the previous week’s reserves of $10.139 billion on March 17, 2023. The central bank’s foreign exchange reserves dropped for the first time in six weeks.

The State Bank of Pakistan (SBP) said the reserves fell because of external debt repayment and stood at $4.24 billion — almost near where they were at the beginning of the month. Reserves held by commercial banks rose by $31m to $5.57bn during the week. Pakistan is in dire need to raise its critically low forex reserves. A stalemate persists between Pakistan and International Monetary Fund for the resumption of loan programme. The government has failed to convince the global lender how it could arrange $6 billion required to service debt in the current fiscal year.

At this juncture, the Chinese debt rollover is critical for Pakistan. On Wednesday, a finance ministry official told Reuters that China is working on a request from Pakistan to roll over a $2 billion loan that matured last week. Pakistan on Thursday kicked off outsourcing of operations and land assets at three major airports to be run through a public private partnership, a finance ministry statement said, a move to generate foreign exchange reserves for its ailing economy.Besides this, the central bank also looks set to raise its key interest rate by 200 basis points to a record high of 22% at its review on April 4, as it struggles to bring down stubborn inflation.

Credit : Independent News Pakistan-INP