For fifth straight session, dollar continues slump against rupee

• Pakistani rupee gains 2.65 against US dollar.
• Reaches 226.15 in the interbank market.
• ECAP chairman says several factors influencing rupee.

KARACHI: The Pakistani rupee continued to gain territory against the US dollar for the fifth straight session in the interbank market on Thursday.

The rupee appreciated 2.65 or 1.17% against the dollar to reach 226.15, down from Wednesday's close of Rs228.80. The rupee gained sharply a day earlier, as the dollar fell by 9.8 or 4.19%.

Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan, speaking on Geo Pakistan, said the current government's promises would take time to complete earlier, but this time around, just a few days after Finance Minister Miftah Ismail mentioned that Pakistan's import bill will reduce, it actually fell by $2 billion.

Data from the Pakistan Bureau of Statistics (PBS) has shown that imports have plunged by 38.3% over the previous month as a sizable cut in imports was witnessed after the government banned a number of luxury items to manage the shortage of dollars in the economy.

Not only did imports decrease, but exports, too, witnessed a plunge. However, pressure on the rupee eased as the trade deficit reduced by 18.3% to $2.64 billion in July, 2022 against $3.235 billion in July, 2021. In June, 2022, the gap was at $4.96 billion.

Apart from this, Chief of Staff Army (COAS) General Qamar Javed Bajwa recently spoke to US Deputy Secretary of State Wendy Sherman to help expedite the International Monetary Fund's (IMF) loan programme revival.

Bostan said that just following this, the money lender issued a statement that Pakistan has fulfilled all the prerequisites for the combined seventh and eighth reviews of the Extended Fund Facility — showing that the army chief's call played its role.

IMF's Resident Representative for Pakistan Esther Perez Ruiz said in a statement Tuesday that a board meeting is tentatively scheduled for late August once adequate financing assurances are confirmed.

In case the IMF releases the $1.2 billion later in August, Bostan said the dollar could fall to 180-190against the Pakistan rupee and will continue to break records.

"...this was the actual level of the dollar. Before the political instability in the country and the Punjab by-elections — which upset everything, including the markets — the dollar wasn't at such highs," he said.

Bostan added that earlier there were fears about whether the government might survive or not, but now, after the Election Commission of Pakistan's verdict on PTI's prohibited funding, the coalition has decided to approach the Supreme Court — signalling that it is here to stay.