The Pakistani rupee showed improvement against the US dollar in the open market on Thursday, as the local currency also strengthened in the inter-bank market.
During the day, currency dealers Business Recorder reached out to said the rupee was being quoted at 289 for selling and 286 for buying purposes for customers.
However, at the ending of trading, the currency closed at 285.75 for buying and 288.75 for selling purposes, according to data provided by the Exchange Companies Association of Pakistan (ECAP).
On Wednesday, it had closed at 289.5 for selling and 286.5 for buying.
In the inter-bank market, the rupee finally ended its 17-session depreciation run against the US dollar, as it appreciated 0.26% to settle at 287.38, an increase of Re0.76.
The gap between rates in the inter-bank and open markets is required to be less than 1.25% under one of the structural benchmarks set by the International Monetary Fund (IMF).
In a key development, the IMF staff and Pakistani authorities reached a staff-level agreement on the first review of the IMF Stand-By Arrangement (SBA) program on Wednesday.
The signing of the staff agreement paves the way for the disbursement of the second tranche, amounting to $700mn (SDR 528mn). With this tranche, the total disbursements under the SBA will reach $1.9 billion.
The IMF authorities acknowledge that the focus is on reverting to a market-determined exchange rate and bolstering FX reserves.
“While inflows following increased regulatory and law enforcement helped normalize import and FX payments and rebuild reserves, the authorities recognize that the rupee must remain market-determined to sustainably alleviate external pressures and rebuild reserves,” read a statement.
“To support this, they plan to strengthen the transparency and efficiency of the FX market and to refrain from administrative actions to influence the rupee,” it added.