The rupee lost Rs1.1 against the dollar in the interbank market during morning trade on Friday.
The local currency was changing hands at Rs219.7 per dollar at 11:45am, according to data shared by the Forex Association of Pakistan.
On Thursday, the inflow of funds from the International Monetary Fund (IMF) helped add to the gains of the Pakistani rupee for the third successive session, as the rupee had closed at 218.60 after appreciating Re0.15 against the greenback.
However, economic headwinds have continued to engulf Pakistan that reported its Consumer Price Index (CPI) at a multi-decade high of 27.3% on a year-on-year basis in August 2022 from a year earlier, data showed on Thursday, as authorities warned massive flooding in the country could exacerbate already skyrocketing prices.
Moreover, foreign exchange reserves held by the State Bank of Pakistan (SBP) fell $113 million, clocking in at an alarming level of $7.7 billion as of August 26, 2022.
The reserves’ position is critical for Pakistan which is desperately seeking dollar inflows to meet its balance-of-payments needs. A low level of reserves caused severe pressure on its currency market with the rupee witnessing its worst monthly performance in July in over 50 years.
