Rupee continues to gain ground vs dollar

Recovers 0.19% to Rs238.38 after IMF official’s remarks

KARACHI:

Pakistani currency maintained its modest recovery for the third consecutive working day on Tuesday, as it regained 0.19% (Rs0.46) to Rs238.38 against the US dollar in the inter-bank market after the International Monetary Fund (IMF) said “Pakistan has completed prior actions for loan review”. The rupee had closed at Rs238.84 on Monday, according to Pakistan’s central bank data.

With the latest day-to-day gain, the rupee has cumulatively recovered 0.65% (or Rs1.56) in the past three working days. Earlier, the currency fell a cumulative 13.75% (or Rs31.31) in the prior 10 consecutive working days to an all-time low at Rs239.94 against the greenback by Thursday last week. Analysts said the rupee managed to close up after the IMF’s country representative was quoted by Bloomberg as saying that Pakistan had met the last prior action for the combined seventh and eighth review following the increase in petroleum development levy on July 31.

Earlier, Pakistan successfully achieved a staff-level agreement with the IMF for the revival of $7 billion loan programme by the last week of August. Finance Minister Miftah Ismail has said that the IMF executive board is scheduled to meet on August 24 to give its final approval for resumption of its programme for Pakistan.

This would be followed by the release of next loan tranche of $1.2 billion. Other multilateral and bilateral creditors and friendly countries would also unlock their financing for the country. The resumption of foreign financing would not only boost the country’s foreign exchange reserves, but would also help strengthen the rupee. Besides, analysts said, Pakistan’s import bill had dropped below $5 billion in July, compared to $7.7 billion in June.