The Pakistani rupee on Tuesday remained largely stable, ticking up Rs0.02 to close at Rs278.18 against the US dollar in the inter-bank market amid commencement of talks with the International Monetary Fund (IMF) for a potential new loan programme of $8 billion.
According to the State Bank of Pakistan’s (SBP) data, the local currency had closed at Rs278.20 against the greenback on Monday.
The rupee has continued to consolidate around current levels, as reports suggest the country will be able to secure a $7-8 billion loan package for four years, coupled with foreign investment inflows from Saudi Arabia.
Multilateral inflows and prospects of billions of dollars in investment from the kingdom are expected to boost Pakistan’s foreign exchange reserves and help the rupee sustain recent gains.
Higher receipts from creditors will also prompt the government to extend more financing for import of raw material as well as ramp up economic growth in the next fiscal year, ie, 2024-25.
Projections indicate an increase in export earnings of Pakistan amid improvement in the purchasing power of the global economy, driven by a slowdown in inflation.
To recall, the rupee has gained 10.40%, or Rs28.92, in the past eight months since touching the record low at Rs307.10/$ in the first week of September 2023. Exchange Companies Association of Pakistan (ECAP) reported that the rupee appreciated Rs0.05 on a day-on-day basis, closing at Rs279.50/$ in the open market.
The currency appreciation in both markets signals some improvement in sentiment coupled with the rise in supply of the foreign currency compared to its demand for import payments.
Gold down
Gold extended losses for the third consecutive working day, losing a fresh Rs1,200 to Rs241,100 per tola (11.66 grams) in line with the global trend.
The precious metal has cumulatively shed Rs2,700 in the past three days, according to the rate list released by the All Pakistan Saraf Gems and Jewellers Association. In the international market, bullion has dropped $29 in the last three days, standing at $2,337 per ounce (31.1 grams).
Published in The Express Tribune, May 15th, 2024.
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