Rupee gets stronger

KARACHI: The rupee posted more gains on Thursday due to healthy supplies, and following an approval of $500 million disbursement from the International Monetary Fund (IMF) to Pakistan for budget support, dealers said.

The rupee closed at 155.01 to the dollar, up 0.25 percent from Wednesday’s close of 155.39 in the interbank foreign exchange market.

The rupee gained 20 paisa to settle at 155.70 against the dollar in the open market.

Dealers said the local unit continued to march upward on the back of thin dollar demand from importers and strong inflows.

Moreover, the news of approving loan tranche after the completion of delayed second to fifth reviews of Pakistan $6 billion Extended Fund Facility by the IMF Executive Board lifted trader sentiment.

The latest disbursement approval brings total purchases for budget support under the arrangement to about $2 billion.

“The further appreciation in the rupee’s value against the dollar is due to the impact of the IMF’s endorsement for loan disbursement to Pakistan as these inflows will increase the foreign exchange reserves and support the rupee in coming days,” said a foreign exchange dealer.

“We expect the rupee to gain more strength, trading at 154.50 to 154.80 in the sessions ahead.”

The IMF, in a latest statement sees the current monetary stance as appropriate and supports the nascent recovery.

Authorities have also continued to advance their reform agenda in key areas, including on consolidating central bank autonomy, reforming corporate taxation, bolstering management of state-owned enterprises, and improving cost recovery and regulation in the power sector.

These were the pre-conditions that the government was seen implementing over the last couple of months, it said.