Web Desk (LTN EWS): Pak Rupee gets better for the sixth day in a row. It gains 0.94 percent and is now worth Rs224.04 per US dollar. The Pakistani currency kept going up for the sixth straight business day, as it gained 0.94 percent (or Rs2.11) against the US dollar to end the day at Rs224.04 on the inter-bank market on Friday.
The rupee kept getting stronger against the U.S. dollar because the supply of foreign currency kept growing faster than the demand for it in the system.
Because the rupee is getting stronger, exporters are selling dollars on the market. Before, they didn’t give out enough dollars because they expected the local currency to drop even more.
According to data from the central bank, the rupee ended the day on Thursday at Rs226.15. In the last six working days, the value of the currency has gone up by Rs15.90, or 6.63 percent.
Before that, the rupee lost 13.75 percent, or Rs31.31, against the dollar for 10 straight business days, reaching an all-time low of Rs239.94 on July 28.
The rupee had its biggest daily gain of Rs9.58, or 4%, on Wednesday. This was because the country’s trade deficit was cut in half in July compared to June, and the International Monetary Fund (IMF) said that Pakistan had met all the requirements to restart its $7 billion extended loan program.
Finance Minister Miftah Ismail said at the Pakistan Stock Exchange (PSX) on Friday that the rupee had a record-high recovery because more foreign currency came in than went out.
“We did it (support the rupee) by cutting imports by a lot. In July, they were $4.9 billion, down from $7.7 billion in June,” he said.
“We may still be under pressure to pay for imports for a day or a half day in the next two weeks.
The rupee has gotten too big because of bad feelings. But in the end, the basics won out, and the rupee has been going up for a while now,” Ismail said.
“When we made our government (in April 2022), we made plans for the rupee and foreign exchange reserves for the next six months,” he said.
He also said that no one knew how much the rupee would go down and how much it would go up.
Under the market-based exchange rate mechanism, the exchange rate between the rupee and the dollar is now set by the market. “The IMF does not allow interventions,” which is when the central bank gives dollars to the market to keep the rupee up.
He said there was nothing else to do, but the rupee had to take the hit of a big current account deficit ($2.3 billion) in June because the country’s foreign exchange reserves kept going down.
Pakistan bought things worth $80 billion from other countries and sold things worth $31 billion. It led to a trade deficit of $48,3 billion, which was the highest ever, and a current account deficit of $17,40 billion, which was the second highest ever.
The finance minister said, “No country can grow and be financially stable with this kind of current account deficit.”
“Right now, my top goal is to cut down on imports. I won’t let imports go up for the next three to four months. I know that this plan will slow down the economy, but we don’t have any other options right now.”
