Rupee gains strength against USD following IMF deal

The Pakistani rupee gained against the US dollar following the agreement with the International Monetary Fund (IMF) and was being traded between Rs280 and 285 on the first day of business after Eid holidays.

Exchange Companies Association of Pakistan (ECAP) President Malik Bostan says that the price of the dollar will decrease further when the interbank market opens.

The drop in the greenback's price created a shortage of dollars available with exchange companies as they ran out of capital to buy the currency.

Earlier in the day, the Pakistan Stock Exchange (PSX) opened with a jump of 5.38%, or 2,231 points.

PSX benchmark spiked to 43,684 points in the opening moment at 9:31 am. Trading at the stock exchange, however, halted for 60 minutes immediately after opening to settle large orders under prevailing rules.

Last week, the IMF reached a staff-level pact with Pakistan on a $3 billion stand-by arrangement, the lender said, a decision long awaited by the South Asian nation which is teetering on the brink of default.

The deal, subject to approval by the IMF board in July, came hours before the current agreement with the IMF expires later the same day. Although essentially a bridge loan, it offers much respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.

Pakistan's sovereign dollar bonds were trading higher after the announcement, with the 2024 issue enjoying the biggest gains, up more than eight cents at just above 70 cents in the dollar, according to Tradeweb data.