KARACHI: A sense of stability prevailed in the currency market as the rupee rose for the third session in a row against the US dollar in the interbank market on Thursday.

The State Bank reported the dollar settled at Rs283.51 after losing 10 paise against the local currency. Dealers said the market stayed calm even though importers were facing a tough time getting their letters of credit opened.

Currency experts were sure that there would be no major change in the exchange rate unless restrictions on imports were lifted.

The low imports, mainly of raw materials, were hampering economic growth as many industries like pharmaceuticals have slashed their production for want of key materials.

The raw materials for many industries are required to be imported while the government has restricted the outflow of dollars.

SBP reserves rise

In a separate press release, the State Bank of Pakistan said its foreign exchange reserves increased by $21 million to $7.04bn during the week ended on Dec 8.

The central bank has been buying dollars from the interbank market to maintain its reserves above the $7bn level. The IMF has been insisting on increasing the reserves but massive debt servicing slashes its reserves.

Last week the SBP forex holdings dipped by $237m which was also for debt servicing.

The total reserves of the country were $12.206bn including $5.165bn held by the commercial banks during the week under review.

Published in Dawn, December 15th, 2023