KARACHI: The foreign exchange reserves of the State Bank of Pakistan further declined by $341 million to $8.005 billion during the week ended Sept 23.

The reserves once again reached the point from where they were elevated after landing of $1.16bn IMF tranche. The rupee did recover 4.3 per cent in the last five sessions, but the deteriorating forex reserves position may bring down the morale of the currency market in the coming weeks.

Currency dealers said that the dollar lost another Rs2.49 in the interbank market on Thursday to close at Rs229.63 compared to Rs232.12 a day before.

The currency market attributed the rupee’s recovery to the return of Ishaq Dar as the new finance minister. Mr Dar is believed to have a different view about the exchange rate and may opt for forced devaluation of the dollar as he did in the past.

On the other hand, the fear of further loss compelled the individuals and groups to sell out their holdings which created substantial liquidity in the open market bringing down the greenback price by Rs1.50 to Rs230.50.

The US currency has lost over Rs15 in the last five sessions. The State Bank of Pakistan reported that the country’s total foreign exchange reserves were $13.761bn while the holdings of the commercial banks were $5.756bn.

Published in Dawn, September 30th, 2022