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KARACHI: Following a historic decline the day before, the Pakistani rupee continued to depreciate sharply against the US dollar on Friday, dropping 2.73 percent or Rs7.17.
As per the State Bank of Pakistan (SBP), the rupee closed at 262.6 after a fall of Rs7.17 or 2.73%.
This takes combined depreciation in two sessions (Thursday and Friday) to 12.1%.
Interbank closing #ExchangeRate for todayhttps://t.co/ypqbKr5xot pic.twitter.com/eKUgXjr1Pf
— SBP (@StateBank_Pak) January 27, 2023
The rupee had earlier hit a level of 264 in intra-day trading.
The decline coincides with Pakistan’s efforts to persuade the International Monetary Fund (IMF) that its exchange rate is “free floating” in advance of the lender’s visit, which was also announced on Thursday.
Many observers predicted that the rupee would depreciate significantly as one of the prerequisites for reviving the IMF bailout program.
On Thursday, Pakistan’s rupee witnessed historic depreciation against the US dollar, settling with a loss of 9.6% in a single session.
The IMF also announced its mission will visit Pakistan from January 31-February 9 to continue the discussions for the 9th review under the Extended Fund Facility (EFF).
The country’s foreign exchange reserves have depleted to a critical level, falling to $3.678 billion in the week ending on Jan 20. This is not enough to finance even three weeks of imports.
This is the lowest level of SBP-held reserves since February 2014.
Total liquid foreign reserves held by the country stood at $9.45 billion. Net foreign reserves held by commercial banks stood at $5.77 billion.
The SBP’s foreign exchange holdings increased by $258 million last week, reaching $4.6 billion. This was the first increase after eight weeks.
