KARACHI: The inter-bank market was only open two days of the previous week, which saw the rupee gain 0.26% against the US dollar.
It finished on Tuesday at 285.99, but it was the development during Eid holidays that came as a significant one for Pakistan.
In a major breakthrough, Pakistani authorities and the International Monetary Fund (IMF) finally reached a staff-level agreement on policies to be supported by a new $3-billion, nine-month Stand-By Arrangement (SBA).
The staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected by mid-July. The development comes as a major relief for the economy struggling with a balance-of-payments’ crisis amid low foreign exchange reserves, and extends Pakistan’s commitment with the lender well into the second half of fiscal year 2023-24.
It is also an upgrade from the earlier expectation that the country would receive $1.1 billion at the conclusion of the ninth review.
While many see this as a positive development for the currency market, arguing that it will provide much-needed clarity and stability, there is bound to be some pressure on the rupee as well with import restrictions having been lifted.
Additionally, the IMF will keep a close eye on the spread between the inter-bank and open markets.
The rupee is likely to see a short-term rally, but its long-term direction will be determined by Pakistan’s economic fundamentals.
Open-market rates
In the open market, the PKR gained 1 rupee for both buying and selling against USD, closing at 287.00 and 290.00, respectively.
Against Euro, the PKR gained 4 rupees for both buying and selling, closing at 310.00 and 313.00 respectively.
Against UAE Dirham, the PKR gained 1 rupee for both buying and selling, closing at 78.30 and 79.00, respectively.
Against Saudi Riyal, the PKR gained 30 paisa for buying and 35 paisa for selling, closing at 74.70 and 75.40, respectively.
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THE RUPEE
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Weekly inter-bank market rates for dollar
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Bid Close Rs. 285.80
Offer Close Rs. 286.00
Bid Open Rs. 286.55
Offer Open Rs. 286.75
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Weekly open-market rates for dollar
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Bid Close Rs. 287.00
Offer Close Rs. 290.00
Bid Open Rs. 288.00
Offer Open Rs. 291.00
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Copyright Business Recorder, 2023
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