Rupee gains against US dollar as Pakistan meets IMF condition

Pakistan’s rupee registered a gain against the US dollar as the government managed to pass the State Bank of Pakistan (SBP) (Amendment) Bill, 2021 in Senate earlier on Friday, its last condition ahead of the board meeting of the International Monetary Fund (IMF).

As per the State Bank of Pakistan (SBP), the rupee closed at 176.77 after a day-on-day appreciation of 21 paisas or 0.12% in the inter-bank market. The rupee had earlier registered three consecutive falls before remaining stable on Thursday.

In a major economic development, the Senate passed the SBP (Amendment) Bill, 2021, by a margin of one vote, scraping through to meet the last key condition of the $6-billion IMF programme ahead of the sixth review that is set to take place on February 2.

Rupee's three-day losing streak ends, currency stable against US dollar

“Giving autonomy to the SBP was part of the IMF programme for a while, and is in line with international standards,” Saad Hashmey, Executive Director at BMA Capital, told Business Recorder.

“The SBP bill enactment will pave way for the disbursement of the IMF loan. The funds are required because Pakistan’s foreign exchange reserves are depleting and for that we need foreign funding, alongside prudent fiscal and monetary measures,” added Hashmey.

Meanwhile, the country’s foreign exchange reserves fell sharply over $1.5 billion in the first three weeks of January and stood at $ 22.482 billion as of January 21, 2022, down from $24.019 billion as of December 31, 2021, a decline of 6% or $1.537 billion, mainly due to massive external debt servicing.

On the other hand, the completion of the IMF review would make available SDR 750 million (about $1,059 million), bringing total disbursements under the EFF to about $3,027 million.

Talking about the implications of the Senate development, Hashmey stated that “it should be a stabilisation measure in both short- and long-term".

"The rupee should bounce back now," added Hashmey.

Inter-bank market rates for dollar on Friday

BID                            Rs 176.70           

OFFER                      Rs 176.80

Open-market movement

In the open market, the PKR gained 50 paisas for both buying and selling against USD, closing at 177.50 and 178.50, respectively.

Against Euro, the PKR gained 2.50 rupees for buying and 2.55 rupees for selling, closing at 198 and 199.95, respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 49.42 and 49.90, respectively.

Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 47 and 47.45, respectively.

Open-market rates for dollar on Friday

BID                            Rs 177.50

OFFER                      Rs 178.50