Rupee gains 1.04%, closes at 270.51 against US dollar
- Market optimistic over expected IMF deal
- Currency could remain under pressure until inflows from bilateral and multilateral institutions are materialised
The Pakistani rupee maintained an upward momentum against the US dollar, as it appreciated 1.04% in the inter-bank market on Thursday amid expectations of the resumption of the International Monetary Fund (IMF) programme.
As per the State Bank of Pakistan (SBP), the currency closed at 270.51 against the US dollar, an increase of Rs2.82. The currency has depreciated by 23.7% during the ongoing fiscal year against the greenback.
The rupee had also made significant strides against the US dollar on Wednesday, closing at 273.33 against the US dollar, an appreciation of Rs2.95 or 1.08%.
The appreciation is “happening amid hope an IMF staff-level agreement will happen soon,” said Mohammed Sohail, CEO Topline Securities in a note.
Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder reports suggest the IMF will submit its Memorandum of Economic and Financial Policies to the Pakistani authorities today, “leading to expectations the IMF programme will be resumed soon”.
The expert said that the resumption of the stalled programme would be a sentiment booster for the market. “However, the currency would remain under pressure until inflows from bilateral and multilateral institutions are materialised.”
“Unless we see surplus inflows there wouldn’t be sustainable appreciation,” he added.
In a key development, Finance Minister Ishaq Dar said on Thursday negotiations between Pakistan and the IMF are “on track” and “we will announce good news soon”.
Speaking to media, Dar said talks between the two sides had entered the final round, progress has been “satisfactory” and he hopes discussions will wrap up today.
Earlier, Minister of State for Finance Dr Aisha Ghaus Pasha said some understanding has been reached with the IMF and some clearance has also been secured at the prime minister level.
She acknowledged that the IMF wants more clearance on some issues but said discussions are moving in a positive direction and the government’s entire focus during the negotiations has been on protecting the common man.
Internationally, the US dollar was little changed on Thursday as investors looked ahead to next week’s US inflation data and digested comments from a slew of Federal Reserve officials who said modest interest rate rises were on the way.
The dollar index, which measures the US currency against six rivals, was 0.029% higher on Thursday at 103.460, having dropped nearly 0.3% in the previous session.
Gold prices, rose for a fourth straight session as the dollar faltered, although bullion’s outlook remained cloudy amid the comments made by Fed officials.
Meanwhile, oil prices, a key indicator of currency parity, were broadly steady on Thursday as the prospect of higher fuel demand in China as it reopens post-COVID curbs were offset by fears that US crude stocks hitting their highest for months may signal weakening demand in the world’s number one economy.
Inter-bank market rates for dollar on Thursday
BID Rs 270.50
OFFER Rs 272.50
In the open market, the PKR gained 2 rupees for buying and one rupee for selling against USD, closing at 276 and 279, respectively.
Against Euro, the PKR gained 2 rupees for buying and 1.50 rupees for selling, closing at 292.50 and 295.50 respectively.
Against UAE Dirham, the PKR gained 90 paisas for buying and 80 paisas for selling, closing at 74.80 and 75.50, respectively.
Against Saudi Riyal, the PKR gained 70 paisas for buying and 80 paisas for selling, closing at 73 and 73.50, respectively.
Open-market rates for dollar on Wednesday
BID Rs 270.50
OFFER Rs 273.50