KARACHI: On Tuesday, the Pakistani rupee strengthened further as investors and traders cheered the news that the International Monetary Fund (IMF) had agreed to expand the amount and duration of a $6 billion loan package.
The Pakistani rupee finished at Rs185.62 versus the US dollar in the interbank market, up Rs0.43 (or 0.23 percent) from its previous close of Rs186.05 on Monday, according to the State Bank of Pakistan (SBP).
Currency dealers believe that the IMF’s announcement that a mission from the Fund will visit Pakistan in May to resume discussions on policies in preparation for the seventh review, as well as the news that the stalled programme would be extended for up to a year and the loan size increased to $8 billion, have boosted sentiment.
Traders and markets were watching the IMF’s progress because it instils investor confidence in the economy, stabilises Pakistan’s foreign exchange reserves, and allows other international financial institutions to support the country.
In addition, the renewal of the IMF programme, as well as a $2.4 billion rollover from China and other foreign inflows, would offer much-needed assistance to the balance of payments and currency.
For the past 12 months, the rupee has been on a downward trend. In comparison to the all-time high of Rs152.27 in May 2021, it has lost 21.90 percent (or Rs33.35) to date.
The Pakistani rupee has depreciated by 17.82 percent (or Rs28.08) from the beginning of the current fiscal year on July 1, 2021, according to figures issued by the central bank.