Pakistani rupee registers minor gain against US dollar

• Pakistani rupee settles at Rs176.34 in the interbank market on Friday.
• Rupee has depreciated by 11.87% since July 1, 2021.
• Foreign exchange reserves fall 3.2% on a weekly basis.

KARACHI: The Pakistani rupee ended the week with support as investors bet inflation data would bolster the case for higher interest rates.

After dipping on Thursday, the local unit stood around Rs176.34 in the interbank market on Friday.

With a fresh rise of 0.11%, the rupee has depreciated by 11.87% (or Rs18.7) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee has maintained the downtrend for the past eight months. It has lost 15.74% (or Rs23.97) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

A local currency dealer said: "We anticipate the rupee to remain stable in the coming days due to some positive developments on the economic front."

Meanwhile, the foreign exchange reserves held by the central bank fell 3.2% on a weekly basis, according to data released by the SBP on Thursday.

On January 14, the foreign currency reserves held by the SBP were recorded at $17,035.7 million, down $562 million compared with $17,597.9 million on January 7.

According to the central bank, the decrease came due to external debt and other payments.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $23,349.7 million. Net reserves held by banks amounted to $6,314 million.

The widening gap between import payments and export earnings is causing a surge in the current account deficit, weakening the balance of payments position and consuming the foreign exchange reserves.