Rupee gains ground against US dollar

The Pakistani rupee maintained an upward trend on the second consecutive working day, gaining another Rs0.70 - 0.35 per cent - to touch Rs199.06 against the US dollar in the interbank market on Monday.

After opening at Rs199.76, it hit an intra-day low of Rs201 at one point before bouncing back against the greenback.

The domestic currency has cumulatively recovered 1.46% (or Rs2.95) in the past two working days in light of the reversal of subsidies on fuel prices.

Over the past two weeks, the rupee had depreciated by 8.7 per cent - Rs16.32 - and touched an all-time low of Rs202.01 on May 26 compared to Rs185.69 on April 30.

Read Rupee crosses 202 against US dollar

The recovery of the Pakistani currency is a sign of high expectations for the revival of the IMF loan programme in the wake of an increase in petroleum prices.

The IMF programme is likely to restart in June, as per finance minister Miftah Ismail. The resumption of the programme means that the IMF would release its next tranche of around $1 billion to Pakistan soon.

Accordingly, the country's capacity to make international payments would improve as the IMF deal would pave way for funds from other multilateral and bilateral lenders, including the World Bank, Asian Development Bank and Asia Infrastructure Investment Bank along with Saudi Arabia.