Rupee posts back-to-back gains against US dollar

Pakistan's rupee registered a gain for the second consecutive session, appreciating 0.23% against the US dollar in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 185.62 after a day-on-day appreciation of 43 paisas, or 0.23%.

IMF-Pakistan talks help rupee gain against US dollar

The market seems to be deriving positivity after Pakistan and the International Monetary Fund (IMF) moved ahead on talks over the stalled $6-billion Extended Fund Facility (EFF), paving way for the disbursement of a $900-million tranche.

The revival of the IMF programme is crucial for the cash-strapped South Asian country, which has seen its reserves deplete to around $10.8 billion. Analysts say the commencement of IMF’s EFF would pave way for lending from other international creditors as well.

Asad Rizvi, ex-Treasury head at Chase Manhattan, said the IMF mission is expected to visit in May, which means a delay in fund-disbursement.

“IMF mission to visit in May for 7th EFF Review, which means arrangement delay and no funding until June,” tweeted Rizvi.

Rizvi was of the view that the delay in funding might add some pressure on foreign exchange reserves “unless funding is arranged from other sources, which is possible”.

Meanwhile, ex-SBP governor, Syed Salim Raza in his address pointed out that the only way to strengthen rupee without a negative impact on exports and foreign exchange reserves is to, somehow, increase the supply of dollars.

This can be done by raising export earnings, inducing foreign direct investments, securing foreign loans and increasing flow of remittances, he said.

Inter-bank market rates for dollar on Tuesday

BID Rs 185.50

OFFER Rs 185.60

Open-market movement

In the open market, the PKR gained 20 paisas for both buying and selling against USD, closing at 185.55 and 186.80, respectively.

Against Euro, the PKR gained 1.50 rupees for both buying and selling, closing at 196.50 and 198, respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 50 and 50.50, respectively.

Against Saudi Riyal, the PKR gained 50 paisas for buying and 40 paisas for selling, closing at 48.50 and 49, respectively.

Open-market rates for dollar on Tuesday

BID Rs 185.55

OFFER Rs 186.80