The Pakistani rupee maintained its upward momentum against the US dollar in the interbank market for the fourth consecutive day on Friday. According to the information collected from the forex traders, the local currency appreciated by 41 paisas and was currently being traded at Rs283.10 On Thursday, the Pakistani rupee went up 0.04 percent against the US dollar, settling for the day at Rs283.51 up by 10 paisas. Meanwhile, foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $21 million on a weekly basis, clocking in at $7.04 billion as of December 8. Total liquid foreign reserves held by the country stood at $12.2 billion. Net foreign reserves held by commercial banks stood at $5.16 billion. “During the week ended on 08-Dec-2023, SBP’s reserves increased by US$ 21 million to US$ 7,040.8 million,” the bank said. Last week, Pakistan’s forex reserves had decreased by $237 million.

In July this year, reserves held by the central bank got a boost as Pakistan received the first tranche of around $1.2 billion from the International Monetary Fund (IMF) after the lender approved a new $3-billion Stand-By Arrangement (SBA). It also got inflows from Saudi Arabia and the UAE. However, the SBP reserves have been under pressure due to debt repayments, rise in import payments after easing restrictions, and a lack of fresh inflows. In a related development, the Asian Development Bank (ADB), in its latest report, ‘Asian Development Outlook (ADO)’, stated that Pakistan’s overall recovery is still constrained by moderate confidence and high inflation eroding purchasing power. The Bank said that Pakistan’s inflation rate averaged 28.5% over July–October, but is expected to ease amid fiscal consolidation and monetary tightening, as well as the improved availability of food and key imported inputs.

Credit: Independent News Pakistan (INP)