Rupee makes modest gains ahead of IMF’s final loan review

KARACHI: The rupee edged higher in the interbank market on Thursday owing to dollar sales from exporters, dealers said.

The rupee closed at 278.77 to the dollar, compared with Wednesday’s closing value of 278.79. In the open market, however, the rupee lost ground versus the greenback. It was trading at 281.26 per dollar for selling down from 281.22 in the previous session.

Dealers said that exporters' dollar sales kept the currency stable. By limiting imports and outflows relative to inflows, the central bank maintains equilibrium and lowers the demand for dollars.

The local unit was also bolstered by the optimism over Pakistan's economy. The International Monetary Fund mission has arrived in Pakistan to review the country’s $3 billion loan programme.

Pakistan has already achieved the targets set by the IMF for the second review and the country will not present a new mini-budget under the current IMF programme, according to reports.

The loan review talks will take place from March 14-18 in Islamabad. This would be final review of the stand-by arrangement, and staff level agreement is expected after this appraisal.

Once staff level agreement is reached, the final tranche of $1.1 billion will be disbursed, following the approval of the IMF’s executive board. The current loan programme ends in April. Federal Minister for Finance and Revenues Muhammad Aurangzeb has said Pakistan would use the opportunity during the IMF review to make the case for a larger, long-term programme.