- Appreciates to 185.45 in inter-bank market on Wednesday
Pakistan's rupee posted a gain for the third consecutive session, appreciating 0.09% against the US dollar in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 185.45 after a day-on-day appreciation of 17 paisas, or 0.09%.
Oil prices, a major determinant of currency parity, extended gains on Wednesday amid simmering geopolitical tensions as Russia cut gas supplies to Bulgaria and Poland, while hopes of Chinese economic stimulus buoyed the demand outlook. The rise in prices does not bode well for Pakistan that has seen its import bill soar to $62.1 billion in the first nine months of FY22.
Umair Naseer, Associate Director of Research at Topline Securities, said Finance Minister Miftah Ismail's talks with the International Monetary Fund (IMF), and the agreement to remove subsidies on fuel and energy “has been taken as a positive indicator by the market, bringing clarity that the programme will not be delayed”.
The revival of the IMF programme is crucial for the cash-strapped South Asian country that has seen its reserves deplete to around $10.8 billion. Analysts say the commencement of IMF’s Extended Fund Facility's (EFF) would pave the way for lending from other international creditors as well.
The IMF mission is expected to visit in May for the EFF 7th Review to hold technical level talks and thus “funds are expected to be released in June”, said Naseer.
The market is also anticipating good news from Prime Minister Shehbaz Sharif's upcoming visit to Saudi Arabia.
“An announcement of loans or deposits by the kingdom will uplift market sentiment. The expected Chinese debt rollover would also add positivity. Following these developments, the rupee is expected to appreciate."
PM Shehbaz will depart for Saudi Arabia on Thursday (April 28), which would be aimed at advancing economic, trade and investment ties with the friendly country as well as creating opportunities for the Pakistani workforce in Saudi Arabia.
Inter-bank market rates for dollar on Wednesday
BID Rs 185.35
OFFER Rs 185.45
In the open market, the PKR gained 5 paisas for buying and 30 paisas for selling against USD, closing at 185.50 and 186.50, respectively.
Against Euro, the PKR gained 2 rupees for buying and 1.50 rupees for selling, closing at 194.50 and 196.50, 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 lost 20 paisas for both buying and selling, closing at 48.70 and 49.20, respectively.
Open-market rates for dollar on Wednesday
BID Rs 185.50
OFFER Rs 186.50