Rupee wipes off losses, appreciates to 278.31/$
PHOTO: FILE
Pakistani currency on Tuesday appreciated Rs0.09 and reached Rs278.31 against the US dollar in the inter-bank market after the International Monetary Fund (IMF) executive board gave final approval for the release of last loan tranche of $1.1 billion.
According to the State Bank of Pakistan (SBP), the rupee had closed at Rs278.40 against the greenback on Monday. At the close of market in the evening, the central bank reported that it had received the IMF’s tranche of $1.1 billion, which is believed to extend support to the currency and give a boost to the country’s foreign exchange reserves.
The currency got support from the central bank’s decision on Monday to keep its key policy rate unchanged at a record high of 22%, contrary to the business community’s demand for a notable reduction to lower the cost of borrowing.
Any reduction in the policy rate is expected to encourage more imports of goods, which will spark a surge in demand for the greenback.
The latest rupee appreciation has partially reversed the recent trend of depreciation, wiping off the losses to 0.46%, or Rs1.28, in the past one month compared to the five-and-a-half-month high close of Rs277.03/$ in the last week of March 2024.
Financial experts pointed out that the release of IMF tranche would take Pakistan’s foreign exchange reserves to around $9 billion, supporting the rupee to remain stable in the near term.
Exchange Companies Association of Pakistan (ECAP) reported that the local currency appreciated Rs0.05 on a day-on-day basis, closing at Rs279.63/$ in the open market. With this, the disparity in rupee values between the two markets remained modest at Rs1.32 (or 0.47%). The IMF has recommended a maximum difference of 1.25% (around Rs3.50 at current levels).
Published in The Express Tribune, May 1st, 2024.
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