Rupee gains as Fitch upgrades Pakistan’s rating

KARACHI: The rupee ended slightly stronger on Tuesday due to positive sentiment after Fitch Ratings upgraded the country’s rating to ‘B-’.The rupee closed at 280.57 per dollar in the interbank market, up from the previous close of 280.6

However, the rupee stayed almost flat in the open market. It was trading at 282.09 against the dollar, compared with 282.08 in the previous session.

“We did not see the immediate impact of record-high remittances and the SBP’s bullish forecast of $14 billion in foreign exchange reserves by June on the currency market on Monday, as the local unit declined on Monday,” a currency dealer said.

“However, the market reacted positively to the news of the rating upgrade, and the rupee gained little ground against the US currency today,” the dealer added.

Fitch has upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating by one notch to ‘B-‘ from ‘CCC+’ with a stable outlook due to improved fiscal consolidation and structural reform momentum under the International Monetary Fund’s loan programme.

According to the Fitch report, tight economic policies are supporting reserve recovery and reducing external funding pressures, though financing needs remain substantial. Lower oil prices and Pakistan’s limited reliance on exports and market-based financing help cushion global trade risks.

The country performed well on IMF targets related to reserves and the primary surplus, but fell short on tax revenue growth, it said.