Pakistan’s rupee gained at news of the International Monetary Fund (IMF) reaching a staff-level agreement with Islamabad on Thursday, as the currency market rejoiced at the expected inflow of $1.17 billion that would boost the country’s falling foreign exchange reserves.

The rupee was being quoted at 208.71, an appreciation of Rs1.39, against the greenback in the inter-bank market.

On Wednesday, rupee had registered a decline against the US dollar in its first trading session after the Eid break, as the currency settled at 210.1, a depreciation of Rs2.19 or 1.04%, against the greenback.

However, the gain comes after the IMF said it has reached a staff-level agreement (SLA) with Pakistan authorities, under which the country will soon receive $1.177 billion.

The agreement is now subject to approval of the Executive Board, it was formally announced by the Washington-based lender early on Thursday.

“Subject to Board approval, about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the programme to about $4.2 billion,” said the IMF in its statement.

Nathan Porter, who led the IMF team in the discussions, also said that in order to support programme implementation and meet the higher financing needs in fiscal year 2022-23, as well as catalyse additional financing, the IMF Board will consider an extension of the Extended Fund Facility (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 market is reacting positively to the IMF announcement,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited.

“On-ground developments, such as international commodity prices, and structural reforms in the economy will drive the economy,” he said, adding that expected funding from friendly countries after IMF approval would improve the country’s foreign exchange situation.

This is an intra-day update