On Friday, Finance Minister Miftah Ismail said that the government will continue to suppress imports for the next three months at the cost of slower economic growth, stressing that it did not have an immediate solution that would avert an economic crisis. Pakistan’s imports on a month-on-month (MoM) basis declined by 37.7% in July 2022 as they remained $4.913 billion compared to $7.880 billion in June 2022. “Furthermore, the decline in July imports, which is expected to fall further in August, would bode well for the currency,” he said. Zafar Paracha, General Secretary at the Exchange Commission of Pakistan (ECAP), in a video message said the improvement in local currency comes after SBP's interventions in curbing speculation. The reserves’ position is critical for Pakistan, which is desperately seeking dollar inflows to meet its balance-of-payments needs. The decline in reserves comes following external debt and other payments, said the SBP. “However, SBP's reserves have dropped by $190 million to an alarming level of $8.39 billion as of July 29, 2022, and this could negatively hit the exchange rate,” it added. “As a result of positive sentiment in market, rupee has continued recovering lost ground against the US dollar,” said Trust Securities and Brokerage Limited (TSBL) in a note on Friday. The latest appreciation came after Minister of Finance Miftah Ismail said “one friendly country” has confirmed its assurance of helping Pakistan in meeting what the International Monetary Fund (IMF) calls a funding gap, saying that an announcement will be made soon.
The currency has now improved Rs15.9 or 7.1% in the last six sessions. On Thursday, the currency had continued on its merry recovery path, closing at 226.15, an appreciation of Rs2.65 or 1.17%.
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