On back of low forex reserves, Pakistani rupee sheds more value against dollar

On the back of low foreign exchange reserves and bleak economic indicators, the Pakistani currency remained under pressure and depreciated by 19 paisas in the interbank trading on Monday, reported 24NewsHD TV Channel. 

According to currency dealers, the local unit shed its value during today’s trading session allowing the US dollar to bolster as the greenback was settled at Rs228.34 in the interbank.

Interbank closing #ExchangeRate for todayhttps://t.co/UORNcYzYwH pic.twitter.com/RqZzoFhLV8

— SBP (@StateBank_Pak) January 16, 2023

On Friday, the last working day of the previous week, the US dollar went up by 1 paisa against the Pakistani rupee and was closed at Rs228.15.

Interbank closing #ExchangeRate for todayhttps://t.co/y29qcmPMAO pic.twitter.com/Nl2VMaQkDF

— SBP (@StateBank_Pak) January 13, 2023

Pakistan is facing a crucial shortage of dollars as the State Bank’s forex reserves dwindled to nearly $4 billion -- the lowest in nearly nine years -- with obligations of more than $8 billion due in the first quarter alone.

The reserves are enough to pay for less than a month of imports, according to analysts.

Meanwhile, the inflow of workers remittances declined by 11 per cent in first half (July – December) of fiscal year 2022-2023, according to data released by State Bank of Pakistan (SBP) on Friday.

While in the month of December alone, the inflows stood at $2bn, decreasing by 20% YoY and 4.7% MoM compared to $2.5bn in December 2021 and $2.1bn in November 2022, respectively.

During Dec 2022, workers’ remittances recorded an inflow of US$2.0 billion. For detail see https://t.co/rPOvn9Dr8Nhttps://t.co/7XBd4uOcHC pic.twitter.com/wxEZKq9zbk

— SBP (@StateBank_Pak) January 13, 2023

December was the fourth successive month wherein the workers’ remittances recorded a continuous month-on-month decline in inflows mainly due to the increasing spread between official and informal channels.

Reporter Ashraf Khan