Rupee holds steady

KARACHI: The Pakistani rupee closed nearly flat on Tuesday due to a balanced demand and supply of the US dollar in the market, ending at 279.67 against the US dollar, barely changed from its previous close of 279.66.

In the open market, however, the rupee lost ground, trading at 281.27 against the dollar, down from 281.20 on Monday.Dealers stated that debt repayments and import payments, particularly for oil, continued to exert pressure on the currency. However, the local unit remained steady during Tuesday’s session due to the balance between dollar demand from importers and supply from exporters.

Pakistan’s current account posted a deficit of $420 million in January, reversing from a surplus of $474 million in the previous month. Currently, the foreign exchange reserves held by the State Bank of Pakistan stand at $11.20 billion as of February 14 -- enough to cover just over two months of imports.

Upcoming disbursements from the International Monetary Fund (IMF) are anticipated to bolster foreign reserves. An IMF mission has arrived in Islamabad to discuss approximately $1 billion in climate financing for Pakistan. This disbursement will be made through the Fund’s Resilience and Sustainability Trust, established in 2022 to provide long-term concessional financing for climate-related expenses, such as adaptation and transitioning to cleaner energy.

A team of experts from the IMF is scheduled to visit Pakistan in mid-March for the first review of the country’s $7 billion loan programme. A successful review would enable the global lender to release a tranche of around $1 billion to the cash-strapped nation.