Rupee gains post IMF agreement

KARACHI: The rupee rose on Wednesday after Pakistan secured a staff-level agreement (SLA) with the International Monetary Fund (IMF) for a new $1.3 billion arrangement and also agreed on the first review of the ongoing $7 billion loan programme. The rupee closed at 280.26 against the dollar in the interbank market, up from the previous closing rate of 280.42.

The local unit also gained ground in the open market. It traded at 281.94, compared with 282.04 in the previous session. Analysts expect SLA to boost investor sentiment about the country’s economy, hence supporting the rupee.

Topline Securities indicated in a recent note that once the IMF board approves the first review of the Extended Fund Facility (EFF), Pakistan is set to receive $1 billion from the IMF. This approval will also lead to inflows from other multilateral and bilateral lenders, as the central bank’s governor mentioned during the last analyst briefing. After this disbursement, the total funds received under the EFF facility will reach $2 billion. The board’s approval is expected within the next few weeks.

The existing EFF will be supplemented with the Resilience and Sustainability Facility (RSF), amounting to a total of $1.3 billion, pending board approval. The amount for the first disbursement under this facility has not yet been disclosed.