KARACHI: The rupee continued to recover against the dollar on Tuesday, asit gained 40 paisas; following measures taken by the central bank regardingincrease in the average cash reserve requirements to 6 per cent.
It is the second straight day of recovery in the rupee value. The exchangerate ended at Rs174.89 against the greenback from last day’s closing ofRs175.29 in the interbank foreign exchange market.
On Saturday, the State Bank of Pakistan (SBP) had announced an increase inthe average Cash Reserves Requirement (CRR) to 6 per cent to support thelocal currency.
A statement issued by the central bank said it decided to increase theaverage CRR, to be maintained during a period of two weeks by scheduledbanks, from 5 per cent to 6 per cent and the minimum CRR to be maintainedeach day from 3 per cent to 4 per cent.
CRR is the amount of money that the banks are required to keep with theState Bank and is applicable on the demand and time liabilities with thetenor of less than a year.
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The time liabilities with the tenor of more than a year would continue tobe exempted from the maintenance of cash reserves.
The SBP took the measure after the local currency hit an all-time low ofRs175.73 against the dollar on November 12, 2021.
Dealers said the rupee may further recover in case of realisation of theinflows announced under the Saudi assistance package and the IMF tranche.
