The rupee sustained its upward trend against the greenback on Thursday, appreciating marginally to 197.59 against the US dollar owing to a revival of investor-sentiment stemming from hopes of resumption of the International Monetary Fund (IMF) programme.
As per the State Bank of Pakistan (SBP), the currency ended the day at 197.59 after a day-on-day appreciation of 28 paisas, or 0.14%. On Wednesday, the currency had settled at 197.87 after gaining 59 paisas, or 0.30%.
The currency has recovered 2.2% since it hit a historic low of 202.01 on May 26, 2022.
Sentiment has been buoyed by expectations that the IMF will greenlight the disbursement of a $900-million tranche to Pakistan, as the country has now met a key condition by partially rolling back fuel subsidy. Thanks to this, the local currency has been staging a recovery for the past few sessions.
Rupee closes at two-week high of 197.87 against US dollar
Alpha Beta Core CEO Khurram Schehzad reiterated that the rupee has been witnessing robust recovery over the past few sessions, which meant that Pakistan was receiving dollar payments either in the form of exports proceeds, remittances or Roshan Digital Accounts.
Market analysts also said positive speculation surrounding the IMF deal and hopes of its revival were driving optimism in the market.
Stalled IMF programme: Govt fails to successfully persuade IMF
Last week, talks between Pakistan and the IMF for the 7th review under the $6 billion Extended Fund Facility (EFF) programme remained inconclusive, as the Fund pointed out "deviations" on fiscal sides from the policies agreed in the last review. Resultantly, no staff level agreement was reached while the revival of $6 billion EFF was delayed.
The fund emphasised the urgency of concrete policy actions, including in the context of removing fuel and energy subsidies and the fiscal year 2023 budget, to achieve programme objectives. The IMF statement indicates that the government would be taking prior actions in the federal budget for fiscal year 2022-23.
Inter-bank market rates for dollar on Thursday
BID Rs 197.40
OFFER Rs 197.60
Open-market movement
In the open market, the PKR lost one rupee for buying and 60 paisas for selling against USD, closing at 196.50 and 198, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 208 and 210, respectively.
Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 53.50 and 54, respectively.
Against Saudi Riyal, the PKR lost 20 paisas for both buying and selling, closing at 52 and 52.50, respectively.
Open-market rates for dollar on Thursday
BID Rs 196.50
OFFER Rs 198