(Infosette News) KARACHI: At the close of the interbank foreign exchange market on Thursday, the US dollar fell to Rs226.15 against the Pakistani Rupee (PKR)
The rupee’s value increased by Rs2.65 to end at Rs226.15 to the dollar, up from the previous day’s close of Rs228.80 in the interbank foreign exchange market.
Read More: Rupee smacked dollar on the ground; PKR acheive massive gain of Rs 12 against dollar in interbank trade
The local unit experienced a massive recovery over the last five sessions, particularly over the last two days. On July 28, 2022, the rupee reached a historic low of Rs239.94 to the dollar. However, by the end of trading on August 4, 2022, the local currency had gained Rs13.79 against the US dollar.
Currency dealers attributed the rupee’s rise to the State Bank of Pakistan’s close supervision (SBP).
On August 1, 2022, the SBP launched an inspection against the exchange companies. On August 2, 2022, the SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violating SBP regulations.
In addition, the central bank has recently imposed monetary penalties on some ECs. Furthermore, six different ECs have recently terminated 13 franchise agreements due to violations of SBP instructions.
According to currency experts, the rupee was also supported by a decrease in the trade deficit during the first month of the current fiscal year.
Read More Google Glitch shows 1 USD to be equal to PKR 207.1, but the real rate was closer to 240 on July 28.
The trade deficit shrank by 18.33% to $2.62 billion in July 2022, compared to a deficit of $3.23 billion in the same month the previous year.
The trade deficit was primarily reduced due to a 12.8% decrease in import bills during the month under review. The country’s import bill was reduced to $4.86 billion in July 2022, down from $5.57 billion in the same month the previous year.
Experts, on the other hand, expressed concern about the massive decline in foreign exchange reserves. They predicted that inflows from the International Monetary Fund (IMF) would benefit the country’s external sector.
They also stated that the IMF funding would open the door to other bilateral and multilateral funding for Pakistan.