The local unit was up by seven paisas against the greenback which was trading at Rs281.86 at the closing of the market on December 29, 2023, as against the closing of Rs281.93 the previous day.

The local currency started to make some ground against the dollar in interbank and open markets after the International Monetary Fund reached a staff-level agreement with Pakistan on a $3-billion stand-by agreement in July 2023.

The international lender had asked the SBP to a foreign exchange framework free of restrictions on payments and transfers for current international transactions and multiple currency practices.

But the appreciation could not last long as the rupee fell and it was trading at Rs307 in September. Later, the transitional government started cracking down against illegal money exchangers and hoarders. The interim setup gave the credit for rupee’s appreciation to its counteractions.

In November, the IMF staff and Pakistan reached a staff-level agreement on the first review under the SBA. The executive board approval would unlock $700 million out of the $3 billion agreement.

“Pakistan recognises that the rupee must remain market-determined to sustainably alleviate external pressures and rebuild reserves. To support this, they plan to strengthen the transparency and efficiency of the FX market and to refrain from administrative actions to influence the rupee,” the IMF said in the statement.