Rupee recovers sharply against US dollar after IMF announcement

The currency appreciated 0.51% in the inter-bank market, settling at its highest level since December 1

Business Recorder

03 Feb, 2022

Business

The rupee closed at 175.52 after a day-on-day appreciation of 89 paisas. AFP file photo

The Pakistani Rupee (PKR) is maintaining its impressive run against the US Dollar (USD) and posted gains in the interbank market on Thursday after the International Monetary Fund (IMF) approved a $1 billion loan for Pakistan under the stalled External Fund Facility (EFF).

The currency appreciated 0.51% in the inter-bank market, settling at its highest level since December 1 last year.

As per the State Bank of Pakistan (SBP), the rupee closed at 175.52 after a day-on-day appreciation of 89 paisas or 0.51%. This is rupee’s fifth consistent recovery against the US dollar.

“This is the highest day-on-day recovery after December 31, 2021,” said Arif Habib Limited (AHL) in a note.

On Wednesday, the IMF Executive Board completed the sixth review under the Extended Fund Facility (EFF) for Pakistan, allowing for an immediate purchase equivalent to about $1 billion for budgetary support.

“These were all expected developments,” Saad Hashmey, Executive Director at BMA Capital, told Business Recorder.

He said that with the IMF approval, Pakistan's funding programme with the World Bank and the Asian Development Bank (ADB) would also be revived.

Hashmey said the rupee should now stabilise in the current range.

Talking about the latest trade figures, Hashmey said oil prices will continue to be a challenge for Pakistan.

Trade deficit narrowed by 30.1% on a month-on-month basis, from $4.816 billion in December 2021 to $3.362 billion in January 2022.

Inter-bank market rates for dollar on Thursday

BID Rs 175.42

OFFER Rs 175.52

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 176.50 and 177.50, respectively.

Against Euro, the PKR gained 40 paisas for buying while remaining unchanged for selling, closing at 198.10 and 200, respectively.

Against UAE Dirham, the PKR gained 10 paisas for buying and 5 paisas for selling, closing at 49 and 49.45, respectively.