Rupee makes massive gains in interbank market

KARACHI: The Pakistani rupee on Tuesday further strengthened in the interbank market, a day after making a rich recovery against the dollar following the much-awaited deal with the International Monetary Fund (IMF).

The country on Friday secured a $3 billion short-term financial package from the IMF, giving the economy some much-awaited respite as it teeters on the brink of default.

The local currency closed at Rs275.44 against the greenback, gaining Rs10.5 or 3.83% in the interbank market. It closed at 285.99 on June 27 — the last trading session before the Eid holidays.

The dollar had on May 11 soared to a record-high Rs290.93 in the interbank. Since then, it has posted a drop of Rs23.43.

Speaking to Geo News, Topline Securities CEO Mohammad Sohail said that the rupee has gained up to 3% as expected.

"The sustainability of the gains will be confirmed in the coming days as the government claims that the partial funds under the deal will be disbursed by the mid of July."

Sohail added that the government has also claimed that it would secure around $4-$5 billion from Saudi Arabia, the United Arab Emirates, and the Islamic Development Bank — which would improve the dollar liquidity issues.

The Topline Securities chief executive said that if these payments materialise, the rupee will likely remain strong and stable.

“However, the pressure could increase if the payments get delayed.”

If we believe the government’s claims that Pakistan’s reserves will increase to $14 billion by August, then the rupee will likely stabilise around 270 or 280, he added.