KARACHI: The Pakistani currency recovered around 1.5 per cent to hit an intra-day high at Rs132 to the US dollar in the inter-bank market on Wednesday.
“The recovery in rupee is seen following Saudi Arabia’s announcement of a $6 billion aid package for Pakistan,” Exchange Companies Association of Pakistan General Secretary Zafar Paracha said.
The rupee has gained ground on the back of a pledge of $3 billion inflows from Saudi Arabia to fix balance of payment crisis.
Besides, the friendly country has also established a credit line worth another $3 billion for oil supplies to Pakistan for three years.
The rupee in the unregulated open market also regained Rs0.50 to stand Rs133 to the greenback.
Earlier, the record high current account deficit ate up the country’s foreign currency reserves and created a balance of payment crisis on import payment and debt repayment.
The State Bank of Pakistan (SBP) had devalued the rupee by a massive 27 per cent to Rs133.91 to the US dollar in the last 10 months to reduce dollar’s demand in the faltering economy.
Pakistan’s foreign currency reserves have dropped to a critical low level of $8.08 billion. The latest inflows are expected to give a significant boost to the declining reserves.
Pakistan Forex Association President Malik Bostan said this is the first big achievement of the government on the external front during its first 100 days of rule.
Pakistan needed an immediate $2 billion to avert the balance of payment crisis. The announcement of the Saudi Arabian package during Prime Minister Imran Khan’s visit to Riyadh is a good sign. The package has removed uncertainty on the balance of payments front.
