Pakistan's rupee gained in value against the US dollar following revival of the much-awaited International Monetary Fund (IMF) programme, appreciating 0.82% in the inter-bank on Tuesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 220.12 after appreciating Rs1.8 or 0.82% against the greenback.
On Monday, the rupee had recorded a loss for the sixth successive session against the US dollar and depreciated Rs1.26 or 0.57% to settle at 221.92.
The reversal, however, comes on the back of IMF Executive Board's approval.
In a late-night development on Monday, the IMF finally revived its Extended Fund Facility (EFF) programme for Pakistan, as its board approved the disbursement of $1.1 billion for the seventh and eighth tranches.
Additionally, in order to support programme implementation and meet the higher financing needs in the fiscal year 2023, as well as catalyse additional financing, the IMF Board approved an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about $7 billion.
The board met on Monday to consider Pakistan’s combined seventh and eighth reviews under the Extended Fund Facility (EFF); request for waivers of nonobservance of performance criteria and for extension, augmentation, and rephasing of access.
After the Board’s approval, Pakistan will receive around $1.1 billion, which will bring total purchases for budget support under the arrangement to about $3.9 billion, the IMF said.
Economic experts have termed revival of the IMF programme crucial for the cash-strapped economy of Pakistan, which continues to battle dwindling foreign exchange reserves and high inflation.
“We believe that after IMF endorsement, more dollar funding for Pakistan is likely from bilateral, multi-lateral and other sources, which will support foreign exchange reserves,” said Topline Securities in its report on Tuesday.
“This will also bring stability to the currency that had recently come under pressure over the uncertainty of the IMF programme, especially after differences between the federal and provincial governments,” it added.
Globally, the dollar languished on Tuesday after being beaten back from a two-decade high versus major peers by a reinvigorated euro. The dollar index - which measures the greenback against a basket of six currencies - stood at 108.65.
Meanwhile, oil prices, a key determinant of currency parity, remained stable on Tuesday as the market balanced supply concerns with fears that an inflation-induced weakening of global economies would soften fuel demand.
Inter-bank market rates for dollar on Tuesday
BID Rs 220
OFFER Rs 221
Open-market movement
In the open market, the PKR gained 8.50 rupees for both buying and selling against USD, closing at 220 and 222, respectively.
Against Euro, the PKR gained 6 rupees for both buying and selling, closing at 221 and 223 respectively.
Against UAE Dirham, the PKR gained 4.20 rupees for both buying and selling, closing at 61 and 61.50, respectively.
Against Saudi Riyal, the PKR gained 2.30 rupees for buying and 2.40 rupees for selling, closing at 58.70 and 59.20, respectively.
Open-market rates for dollar on Tuesday
BID Rs 220
OFFER Rs 222