The dollar rate against Rupees has touched a 10-month high on Tuesday as the country’s foreign exchange reserves reached $27.4 billion.
Since Sept 30, 2020, the dollar rate increases 77 paisas against the Pakistani rupees and for the first time reaching Rps 165.30. This was due to the inflow of $2.75bn by Special Drawing Rights (SDR) of the International Monetary Fund (IMF).
The State Bank of Pakistan (SBP) stated it got $2.75bn from the SDR allocation declared by the IMF. IMF announced on August 2, that the board members have passed a global allocation of SDR equivalent to $650bn to increase liquidity and give countries some money while dealing with the challenging outcomes of the Covid-19 pandemic.
The distribution of $650bn was determined with a quota set by the country’s contribution to IMF.
Also Read : Dollar rises by 79 paisa in interbank market
Most recent SBP data confirms that the foreign exchange reserves of the central bank are at $17.626bn which includes the $2.75bn of IMF bringing the total amount to $20.4bn. Pakistan will set a historic record, as the country’s total will reach $27.4bn.
The effect on the economy by this change:
Since May 7, the currency started increasing by 8.5 percent, reaching nearly Rs12.92. The abrupt increase will hit exports as the exportable products are built with imported parts in the range of 30pc to 35pc.
The 8.5pc will cause inflation and raising the cost of production. This will make it difficult to improve exports with extra charges of inputs.
Earlier in 2020, the dollar rose by 79 paise against the Pakistani currency in the fourth interbank week of the business week.
According to the Forex Dealers Association, the dollar closed at Rs 160.62 against the Pakistani currency in the interbank market.
On the other hand, the SBP said that the country’s foreign exchange reserves have increased by 178.7 million dollars.
According to the details released by the State Bank of Pakistan, the country’s total foreign exchange reserves have increased to 20.08 billion dollars, while the SBP’s reserves have increased by 19 million dollars to 12.93 billion dollars.
Reserves of commercial banks fell by 10 million dollars to 7.15 billion. The current account balance improved further in October and the current account balance in October stood at 382 million dollars.