November 26, 2021(MLN): US Dollar (USD) hit as high as 176.7 against Pakistani Rupee (PKR) in an intraday trade on Friday in an interbank market as the foreign exchange reserves held by the country plummeted to an eight-month low at $22.77 billion during the week ended on November 19, 2021, shattering the traders' sentiments.
The domestic currency has weakened by 1.58 rupees (10:57 PST) when compared to the previous day’s close of 174.98 against the greenback.
Meanwhile, in the open market, the greenback was traded at 177.50/179.00.
To note, SBP reserves decreased by $691 million to US$ 16.254bn, mainly due to external debt repayment.
Commenting on the decline in reserves, Asad Rizvi, Treasury Head Chase Manhattan Bank said, “The drop since August is worrisome. Early $3bn loan from Saudi Arabia may help, but will not be enough to attain crucial $20bn number unless IMF funding is released earlier, as higher imports will add pressure on forex reserves and PKR.”
On Thursday, Information Minister Fawad Chaudhary said on his Twitter that all legal formalities were settled in the transfer of $3bn from Saudi Arabia and the government will receive a deposit of said amount in the next week. These inflows are likely to ease off some of the pressure on the rupee.
In addition, media sources have claimed that the government is also planning to issue a $1bn Sukuk next week in order to bolster its forex reserves that might keep USD’s gain against the rupee in check.
