April 08, 2022 (MLN): The Pakistani rupee (PKR) rebounded in early morning trade on Friday, appreciating by 68 paisa against the US dollar in the inter-bank market due to clarity on the political front after yesterday's Supreme Court's (SC) decision to restore National Assembly.
After a long spell of depreciation, the domestic currency managed to break this streak despite falling in reserves by $1.07 billion or 5.8% WoW to the lowest level of $17.47bn since June 26, 2020,
This notable decline in reserves was mainly due to debt repayment and settlement of an arbitration award related to a mining project.
In its latest emergency meeting, the Monetary policy committee (MPC) of the State Bank of Pakistan (SBP)hiked the policy rate by 250 basis points to 12.25% to counter the external shocks and inflationary
pressures. The committee stated that the amplified political unrest has resulted in the depreciation of the rupee against the greenback.
Speaking of this recent move of the central bank, Asad Rizvi, former treasury head-chase Manhattan bank said, “SBP hiking of rate by 250bp & imposition of cash margin on 177 products is a hint that the economy is in dolls drum & measures taken earlier was not supportive.”
