- Appreciates 0.6% to settle at 174.48 in inter-bank market on Friday
Approval of the International Monetary Fund (IMF) continued to play its part, as the rupee registered another massive gain against the US dollar, appreciating by over Re1 or 0.60% in the inter-bank market on Friday to settle at its highest level since November 23 last year.
As per the State Bank of Pakistan (SBP), the rupee closed at 174.48 after a day-on-day appreciation of Re1.04 or 0.60%. On Thursday, the rupee had appreciated 89 paisas against the greenback.
This is rupee’s sixth consistent gain against the US dollar, and the highest day-on-day recovery since November 17, 2021.
On Wednesday, the IMF Executive Board completed the sixth review under the Extended Fund Facility (EFF) for Pakistan, allowing for an immediate purchase equivalent to about $1 billion for budgetary support.
“The currency has recovered by almost Rs2 against the US dollar since the IMF approval,” said Malik Bostan, Chairman Exchange Companies Association of Pakistan (ECAP).
“The revival of the programme paves way for other multilateral institutions such as World Bank, Asian Development Bank to resume funding as well,” he said.
Pakistan has been looking to tap the international markets as its foreign exchange reserves continue to post a decline. As per the latest data, reserves held by the central bank decreased a massive $463 million on a weekly basis, clocking in at $15.73 billion.
The decline in reserves comes amid external debt and other payments, stated the central bank. Last week, SBP-held foreign exchange reserves were down a massive $846 million.
Meanwhile, Bostan said “another $3 billion is expected from China as well”. This comes as Prime Minister Imran Khan is on an important four-day trip to China.
He said the latest round of funding could take the rupee to 170-172 range.
Meanwhile, Saad Khan, Head of Research at IGI Securities, told Business Recorder that the approval of the IMF programme, alongside successful raising of $1 billion through Sukuk bonds, has created a positive sentiment.
“The rupee, for the time being, would stabilise, and may improve further after funds from the IMF are received.”
Khan, however, expressed concern over the hike in oil prices in the international market, which could further widen the current account deficit.
Inter-bank market rates for dollar on Friday
BID Rs 174.35
OFFER Rs 174.45
In the open market, the PKR gained 50 paisas for both buying and selling against USD, closing at 176 and 177, respectively.
Against Euro, the PKR lost 1.40 rupees for buying and one rupee for selling, closing at 199.50 and 201, respectively.
Against UAE Dirham, the PKR gained 10 paisas for buying and 15 paisas for selling, closing at 48.90 and 49.30, respectively.
Against Saudi Riyal, the PKR remained unchanged for buying while losing 5 paisas for selling, closing at 46.30 and 46.80, respectively.
Open-market rates for dollar on Friday
BID Rs 176
OFFER Rs 177