Rupee rises on IMF support, eyes monetary policy

By Our Correspondent
December 09, 2023

KARACHI: The rupee strengthened further against the dollar on Friday due to growing optimism regarding Pakistan's economy after the International Monetary Fund said that its executive board will meet next month to consider final approval for the disbursement of the next $700 million tranche from its current loan programme.

Pakistan and the IMF reached a staff-level agreement last month on the first review of an existing $3 billion bailout. The disbursement of the second tranche of the bailout is subject to the approval of the Fund's board during its meeting scheduled for January 11.

Currency dealer exchanging Rs1,000 note. — AFP/File

In the interbank market, the rupee closed at 283.87 to the dollar, stronger than its previous close of 284.12. It appreciated by 0.09 percentduring the session. The rupee gained 25 paisas to close at 284.75 against the dollar in the open market.

“This [IMF] meeting dispels any uncertainty regarding Pakistan's absence from the IMF board meeting schedule,” said Chase Securities in a note. The Executive Director of the IMF has expressed satisfaction, commending Pakistani authorities for their economic accomplishments and foreseeing a promising future for the country.

He emphasised Pakistan's significance, labeling it not merely as any country but as one of the most crucial nations regionally and globally, it said.

“Despite a $237 million decline in State Bank of Pakistan foreign exchange reserves within a week, primarily due to debt repayments, optimism prevails as the expected IMF tranche next month is anticipated to bolster reserves,” it said.

“Looking ahead, the upcoming monetary policy announcement on Tuesday, December 12, 2023, is on the horizon. While market participants largely anticipate no rate cuts, there is a glimmer of hope for unexpected announcements,” it added.