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Saturday March 02, 2024

Rupee continues winning streak against dollar amid 'market optimism'

Local currency closes at 265.38 in interbank market

By Web Desk
February 15, 2023
A representational image of a man counting rupee notes at a money exchanger. — AFP/File
A representational image of a man counting rupee notes at a money exchanger. — AFP/File

The Pakistani rupee further strengthened on Wednesday against the dollar, continuing its winning streak in the interbank market as the government gears up to present a mini-budget to meet the International Monetary Fund's (IMF) terms.

In the interbank market, the rupee closed at 265.38 after gaining 1.96 or 0.74% against the dollar, up from yesterday's close of 267.34, according to the State Bank of Pakistan's (SBP) data.

Capital market expert Saad Ali said while speaking to The News that the government was taking necessary steps to meet the conditions set by the global lender, in order to resume the stalled loan programme.

This is what is leading to optimism regarding the resumption of IMF programme which will help rebuild the country’s foreign exchange reserves through multilateral and bilateral assistance, he added.

The SBP-held foreign exchange reserves have slipped to $2,916.7 million as of February 3, just enough to provide an import cover of around three weeks.

“The government is swiftly taking prior actions, which is getting Pakistan closer to IMF programme resumption. Moreover, the inflows are improving due to the reduced gap between the official and informal markets,” Fahad Rauf, head of research at Ismail Iqbal Securities told The News on Tuesday.

The Prime Minister Shehbaz Sharif-led government is all set to present the Finance Bill 2023 before the parliament later today, which is expected to be approved by Thursday and will pave way for the authorities to impose taxes of Rs170 billion — in line with the IMF's demands.

Pakistan and the IMF have started virtual talks after 10 days of face-to-face discussions in Islamabad last week on how to keep the country afloat ended without a deal.

The country's economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security.

PM Shehbaz previously called the conditions for the $1.1 billion loan instalment "beyond imagination".