KARACHI: The volatile currency market remained calm for the second session on Monday as the US dollar lost another 53 paise in the interbank market to close at Rs238.84 compared to Rs239.37 in the previous session.

The greenback fell by 57 paise against the local currency on July 29.

Though it looks very small depreciation of the greenback it was big enough to stop the free fall of the rupee, which has lost over 13 per cent in July alone.

The currency dealers explain this change in the context of a joint statement of the Ministry of Finance and the State Bank of Pakistan (SBP) issued on Sunday. The joint statement based on five points provided hopes for the improvement in the economy and promised inflows of dollars to strengthen the foreign exchange reserves.

“Important measures have been taken to contain the current account deficit. Measures are working: import bill fell significantly in July, as energy imports have declined and non-energy imports continue to moderate,” said a tweet from the State Bank on Monday.

“Rupee has overshot temporarily but is expected to appreciate in line with fundamentals over the next few months,” it added.

The current account deficit in FY22 was $17.4 billion which was enough to make the local currency weightless particularly due to the poor foreign exchange reserves of the SBP hovering around $8.6bn.

Published in Dawn, August 2nd, 2022