The Pakistani currency maintained an uptrend for the second successive working day, closing at Rs279.33 against the US dollar in the interbank market on optimism over receiving the International Monetary Fund’s next loan tranche of $1.1 billion in the near future.
According to SBP data, the domestic currency bounced back by 0.06% or Rs0.17 against the greenback on a day-to-day basis on Thursday.
Clarity on the political front has instilled confidence to the market that an IMF team will soon come to conduct the second review of the domestic economy under the loan programme of $3 billion in place.
Read Rupee rises amid political stability
To recall, the IMF had linked the last economic review with the formation of a new government in the centre. The development also helped the currency recover in the open market by 0.10%, or Rs0.28, to close at Rs282.16/$, ending the nine-day long losing streak in the retail market. Accordingly, the disparity in the value of the rupee between the two markets trimmed to 1.01% or Rs2.83.
Meanwhile, Pakistan’s foreign exchange reserves (held by SBP), however, dropped by $44 million to $8.01 billion in the week ended February 16 on foreign debt repayments, according to SBP.
The reserves provide import cover for less than two months, as debt repayments are not allowing them to stabilise and improve despite the foreign currency inflows from export earnings and stable to positive inflow of workers’ remittances.
Published in The Express Tribune, February 23rd, 2024.
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