KARACHI: Dealers stated the rupee finished steady versus the dollar on Tuesday, ahead of the Reserve Bank of India’s monetary policy statement slated for today, December 14, 2021.
In the interbank foreign currency market, the exchange rate finished at Rs177.88 versus the dollar, down from Rs177.89 the day before.
Market players, according to dealers, are expecting a large hike in the State Bank of Pakistan’s main policy rate (SBP).
In less than a month, the SBP will issue its second policy statement. The central bank had earlier released a statement on November 19, 2021, in which it announced a 150-basis-point rate hike to 8.75 percent.
The future policy rate is expected to rise by 100 basis points, according to market experts.
The demand for the dollar for import payments remained strong, according to the merchants. Inflows, likewise, are insufficient to fulfil demand.
During the first five months of the year (July-November), remittances sent by Pakistanis living abroad increased by 9.7% to $12.9 billion.
They said that the rupee was under pressure due to the hefty import bill. According to official figures from the Pakistan Bureau of Statistics (PBS), the country’s import bill increased by 69.17 percent to $33 billion in the first five months of the fiscal year 2021-22, compared to $19.47 billion in the previous fiscal year’s equivalent months.
The trade gap increased dramatically as a result of the big imports. During the months under examination, the trade deficit increased 112% to $20.59 billion, compared to a deficit of $9.72 billion in the same time previous fiscal year.
By the week ending December 3, 2021, Pakistan’s foreign currency reserves have climbed by $2.652 billion to $25.151 billion. By the week ending November 26, 2021, the country’s foreign currency reserves had risen to $22.499 billion.