A currency changer counts US dollar notes in Rawalpindi, Pakistan, on July 29, 2022. (Xinhua/Ahmad Kamal)
Pakistani economic experts are of the view that the recent depleting import bills, International Monetary Fund’s positive statement on loan disbursement and political stability contributed to the rupee recovery.
ISLAMABAD, Aug. 6 (Xinhua) — Pakistani rupee continued its recovery drive against the US dollar for the fifth consecutive working session on Friday in the interbank market, appreciating by more than 0.90 percent, according to the State Bank of Pakistan (SBP).
The greenback closed at 224.04 rupees on Friday from 226.15 rupees on Thursday when the local currency appreciated by 1.17 percent as compared to the previous day, the SBP figures showed.
The US dollar lost more than 6 percent of its value against the rupee during the last five trading sessions, with the rupee making huge single-day gains against the US dollar on Wednesday when it is appreciated by more than nine rupees in the interbank market.
Earlier, the local currency had slumped by more than 13 percent in the prior 10 consecutive working days, with an all-time low closing at 239.94 rupees on July 28, according to the SBP statistics.
Pakistani economic experts are of the view that the recent depleting import bills, International Monetary Fund’s (IMF) positive statement on loan disbursement, and political stability contributed to the rupee recovery.
Farhan Bokhari, an Islamabad-based political economist, told Xinhua that the Pakistani government has taken a wise decision of cutting down imports, which significantly reduced Pakistan’s trade deficit, resulting in a low demand for dollars in the domestic market.
According to the latest data from the Pakistan Bureau of Statistics, the trade deficit fell 18.3 percent to 2.64 billion dollars in July 2022 against 3.235 billion dollars in July 2021.
Bokhari said that besides import cuts, Pakistan is expected to receive over 1 billion dollar loan facility soon from the IMF as the country has met all the necessary conditions, which the international lender has already acknowledged.
Other friendly countries are also ready to engage with Pakistan under multilateral and bilateral agreements, which will further raise the dollar inflow in the country, resulting in further consolidation of the rupee, he said.
People shop at a supermarket in Islamabad, Pakistan on April 7, 2022. (Photo by Ahmad Kamal/Xinhua)
Federal Minister for Finance and Revenue Miftah Ismail said Friday that the dollar outflows have been surpassing inflows, which is why the rupee had fallen sharply against the greenback last month.
In a bid to control the fall of local currency and maintain the balance of trade, the government would control imports for at least three months, saying Pakistan’s import bill in June was 7.7 billion dollars and if the current account deficit widened to such an extent, it would create pressure on the rupee.
He said that the government has been in the process of developing policies to increase exports to earn valuable foreign exchanges and promote economic development.
“We do not want economic growth without exports. Growth is only favorable when it is export-oriented,” he said.■