Rupee at 5-week high over IMF loan optimism

Currency gains ground vs dollar for ninth consecutive day

KARACHI:

Pakistani currency hit a five-week high at slightly below Rs284 against the US dollar in the inter-bank market on Friday, maintaining its uptrend for the ninth consecutive working day amid euphoria over the IMF funding.

According to State Bank of Pakistan’s (SBP) data, the rupee extended gains by 0.09%, or Rs0.25, to close at Rs283.87 against the greenback. The currency has cumulatively improved 0.62%, or Rs1.77, in the past nine working days. Exchange Companies Association of Pakistan (ECAP) reported that the currency appreciated 0.08%, or Rs0.25, on a day-on-day basis and closed at Rs284.75/$ in the open market.

The latest strength in the currency came after the IMF announced that its executive board would consider approving the next loan tranche of $700 million for Pakistan on January 11. The announcement dispelled the prevailing uncertainty about the loan tranche.

Read: Rupee resilient at Rs284 against dollar

The much-anticipated approval of $700 million will unlock another $1.5-2 billion from other global creditors. The Asian Development Bank (ADB) has already approved around $650 million for schools and food security, supporting the rupee in maintaining its uptrend.

Talking to The Express Tribune, ECAP General Secretary Zafar Paracha said “the currency will recover and stand below Rs280/$ by the end of December 2023…and reach Rs250-260/$ by the end of current fiscal year on June 30, 2024.”

He said the second round of administrative measures had helped the rupee to halt its losing streak against the greenback and resume recovery from mid-November 2023.

Under the second round, “banks were asked by the authorities concerned to stop speculating about rupee depreciation,” he said.

Published in The Express Tribune, December 9^th, 2023.

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