ISLAMABAD: The Pakistani rupee maintained its upward movement against the US dollar, strengthening to the 223 level in the inter-bank market on Friday.
At 12:40 pm, the local currency was being quoted at 223.96, an appreciation of Rs2.19 or 0.98% against the greenback, during intra-day trading.
On Thursday, the currency had continued on its merry recovery path against the US dollar, closing at 226.15, an appreciation of Rs2.65 or 1.17%.
The development came after Minister of Finance Miftah Ismail said “one friendly country” has confirmed its assurance of helping Pakistan in meeting what the International Monetary Fund (IMF) calls a funding gap, saying that an announcement will be made soon.
“As a result of positive sentiment in market, rupee has continued recovering lost ground against the US dollar,” said Trust Securities and Brokerage Limited (TSBL) in a note on Friday.
“However, State Bank of Pakistan’s (SBP) reserves have dropped by $190 million to an alarming level of $8.39 billion as of July 29, 2022, and this could negatively hit the exchange rate,” it added.
The decline in reserves comes following external debt and other payments, said the SBP.
The reserves’ position is critical for Pakistan, which is desperately seeking dollar inflows to meet its balance-of-payments needs.
Zafar Paracha, General Secretary at the Exchange Commission of Pakistan (ECAP), in a video message said the improvement in local currency comes after the SBP’s interventions in curbing speculation.
“Furthermore, the decline in July imports, which is expected to decline further in August, would bode well for the currency,” he said.