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The impact of Pakistan’s last-minute deal with the International Monetary Fund (IMF) was felt on Monday as the rupee made significant gains against the US dollar in the open-market.

The US dollar was being quoted at Rs285, a decrease of Rs5, currency dealers conveyed to Business Recorder.

However, trading volume was reportedly thin as a number of exchange companies remained shut on account of bank holiday.

All banks, DFIs and MFBs are closed for public dealing and hence, there was no inter-bank trading.

“A better idea of the value would be seen tomorrow (Tuesday),” Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), told Business Recorder.

“We expect the US dollar would open with a decrease of Rs2-3 in the inter-bank market,” he added.

Last week, the rupee settled at 285.99 against the US dollar in the inter-bank market.

Paracha said the appreciation comes after Pakistan entered a new $3 billion Standby Arrangement (SBA) with the International Monetary Fund (IMF).

The IMF announced on Friday that its staff and Pakistani authorities have reached an agreement on policies to be supported by a $3-billion, nine-month SBA.

The staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected by mid-July.

“The new SBA builds on the authorities’ efforts under Pakistan’s 2019 EFF-supported programme which expires end-June,” Nathan Porter, IMF Mission Chief to Pakistan, was quoted as saying in the press release on the day the Extended Fund Facility expired.

Market analysts had said the deal would have a positive impact on the exchange rate.

“In the short term, we anticipate the Pakistani Rupee (PKR) to strengthen, driven by a positive sentiment arising from the new SBA,” said Arif Habib Limited (AHL) in a report on Friday.

“However, we expect any recovery to be temporary due to the anticipated opening up of forex markets and the easing of import restrictions, which will exert pressure on the currency,” added the report.

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