The Pakistani currency has maintained uptrend against the US dollar, as it hit a new over one-year high at Rs154.58 to the US dollar in the inter-bank market on Friday as supplies of the foreign currency remain high in the market compared to its demand.
The rupee has made a notable fresh gain on the day the World Bank approved $1.3 billion for Pakistan, including $600 million for Ehsaas programme and to reduce poverty in the country.
Besides, the country geared up to raise up to $1 billion from international market through launch of the Eurobond.
The rupee closed at Rs155.01 to the greenback on Thursday, according to Pakistan’s central bank.
With a fresh gain of Rs0.43 on Friday, the rupee has recovered 8.22% or Rs13.85 in the past seven-month to date since it hit all-time low of Rs168.43 on August 26, 2020.
“The rupee has maintained uptrend mainly on reports Pakistan has resumed International Monetary Fund’s (IMF) loan programme worth $6 billion the other day,” said Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan while talking to The Express Tribune.
He said that revival of the IMF programme after remaining on hold for about a year since the Covid-19 outbreak in Pakistan in February 2020 has revived the confidence level of local and global business community in the domestic economy. Accordingly, the development helped rupee strengthen further.
The revival of IMF programme would also result in increase in supplies of the foreign currency, as the lending institution has approved release of third tranche worth $500 million to Pakistan soon.
He said the foreign currency supplies may remain high going forward since the World Bank and Asian Development Bank (ADB) both have announced to give $10-12 billion each over the next five years.
The rupee has maintained uptrend partly on the report that Pakistan’s foreign currency reserves further increased by $275 million last week to $13.29 billion.
The reserves may continue to grow with increasing inflows under the State Bank of Pakistan’s (SBP) initiative Roshan Digital Account (RDA) and strong remittances sent home by overseas Pakistanis.