The Pakistani rupee gained Rs0.17, closing at Rs278.50 against the US dollar in the inter-bank market on Friday after the government approached Middle Eastern banks to borrow $4 billion to overcome a financing gap and secure the International Monetary Fund (IMF) Executive Board's final approval for a $7 billion loan programme.
Meanwhile, gold continued its record-breaking spree for the fourth consecutive working day, rising by a cumulative Rs2,000 per tola (11.66 grams) over four days to reach a new high of Rs262,000 in Pakistan. This surge in the local market contrasts with a downturn in the global market.
According State Bank of Pakistan (SBP) data, the domestic currency had depreciated to Rs278.67 against the greenback on Thursday after losing a total of Rs0.33 over the previous two days.
The decline followed the IMF Executive Board's decision to delay its final approval of the new $7 billion bailout package for Pakistan, citing the country's failure to secure the required $2 billion in foreign financing and the lack of guarantees from friendly countries for the rollover of $12 billion in deposits at the SBPa condition for the new programme.
Subsequently, Finance Minister Muhammad Aurangzeb projected that the IMF Executive Board would approve the loan in September and revealed that negotiations were underway with Middle Eastern banks to secure new foreign loans at lower rates. The cost of the IMF loan has risen to 5.1%.
The recovery of the rupee coincides with a steady improvement in the country's foreign exchange reserves, which have reached a five-week high of $9.29 billion, according to the latest weekly update on Thursday.
With the latest weekly increase of $19 million, the foreign exchange reserves have cumulatively surged by $264.6 million over the past four weeks. The Exchange Companies Association of Pakistan (ECAP) reported that the local currency remained stable at Rs280 per dollar for the third consecutive working day in the open market.
In the local bullion market, gold gained Rs200 per tola to reach Rs262,000 on the day, contrasting with a drop of $12 per ounce (31.10 grams) to $2,492 in the international market. The metal has surged by Rs1,000 in recent days, despite a $20 dip globally.
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