The currency rose for the ninth day in a row to stand at 282.53 rupees/dollar.
Karachi:
Pakistan’s currency continued its upward trend for the ninth straight business day on Friday, hitting a seven-week high of just above 282.50 rupees against the dollar in the interbank market on hopes of imminent foreign exchange inflows.
The rupee rose 0.09% or 0.26 rupees to close at 282.53 rupees against the dollar, according to State Bank of Pakistan (SBP) data. The currency has appreciated cumulatively by 1.10% (Rs 3.11) in the past four weeks.
The Rupee depreciated by 0.08% (Rs 0.25) in the open market to end at Rs 284 to the dollar, the Exchange Companies Association of Pakistan (ECAP) reported.
The difference in the rupee-dollar exchange rate between the two markets remains at 0.52% (Rs. 1.47), much higher than the International Monetary Fund (IMF) recommended limit of 1.25% (about Rs. 4 at current levels). It went below.
The rupee continues to trend higher in interbank transactions following reports of a $1.2 billion loan agreement with the Asian Development Bank (ADB) and approval of a $350 million loan by the World Bank.
After the IMF Executive Board finalized the issuance of the next loan tranche of $700 million, foreign exchange markets expected to receive an additional $1.5 billion to $2.0 billion from multilateral and bilateral creditors in the second half of the year (January-June). It is expected that there will be an inflow of $1 billion.
read Rupee strengthens due to stable foreign currency inflow
Pakistan has already reached a staff-level agreement with the IMF on completion of the first review of the $3 billion loan program, which is due to end by March 2024.
Currency markets are ignoring the recent decline in the central bank’s foreign exchange reserves to below $7 billion due to debt repayments.
Pakistan’s economy needs a consistent flow of US dollars to repay maturing external debt and pay for rising debt costs and imports.
Published in The Express Tribune on December 23rdrd2023.
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