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Wednesday May 22, 2024

Rupee gains ground for fourth consecutive session

Local unit closes day at 262.82 against US dollar after gaining Rs1.56

By Business Desk
February 17, 2023
A Pakistani dealer counts US dollars at a currency exchange shop in Karachi on October 9, 2018. — AFP
A Pakistani dealer counts US dollars at a currency exchange shop in Karachi on October 9, 2018. — AFP

The Pakistan rupee registered gains against the US dollar for the fourth consecutive session as the investors' sentiments were boosted following an adequate dollar supply in the market and hopes of revival of the International Monetary Fund's (IMF) loan programme.

Data from the State Bank of Pakistan (SBP) showed that the local unit closed the day at 262.82 against the US dollar after gaining Rs1.56, or 0.59%, in the interbank market compared to Thursday’s close of 264.38. Meanwhile, the rupee value remained unchanged at 268 in the open market.

Currency dealers attribute this recovery to an improved supply of greenback as exporters are selling their dollar holdings to take advantage of better rates while an increase in remittance inflows is also observed.

The government has undertaken the necessary steps to secure the stalled IMF programme. It has depreciated the currency, increased the cost of gas and electricity, and ultimately unveiled a mini-budget, imposing new taxation measures in an effort to raise an additional Rs170 billion during the ongoing fiscal year 2022-23.

The government appears to be prepared for a staff-level agreement with the IMF since all known prerequisites for the Washington-based lender have been met.

The centre is trying to get the IMF on board in the next day or two as depleting reserves and upcoming repayments on external fronts have pushed the government into the corner. Inflows from the IMF will unlock flows from friendly countries and other multilateral institutions.

Moreover, foreign exchange reserves held by the State Bank of Pakistan (SBP) also rose over $200 million during the week ended February 10 after a hiatus of three weeks.