ISLAMABAD: An International Monetary Fund mission will visit Pakistan later this month to discuss the stalled ninth review of the country’s current funding programme, the lender’s resident representative said on Thursday.

“At the request of the authorities, an in-person Fund mission is scheduled to visit Islamabad January 31st – February 9th to continue the discussions under the ninth EFF review,” Esther Ruiz Perez said in a message to Reuters.

Meanwhile, the Pakistani rupee fell 9.6% against the dollar on Thursday, central bank data showed - the biggest one-day drop in over two decades - in a slump that may persuade the global lender to resume lending to the country.

The currency’s official value closed at 255.4 rupees against the dollar versus 230.9 on Wednesday, the central bank said.

Facing an increasingly acute balance of payments crisis, Pakistan is desperate to secure external financing, with less than three weeks worth of import cover in its foreign exchange reserves.

Pakistan secured a $6 billion IMF bailout in 2019. It was topped up with another $1 billion last year to help the country following devastating floods, but the IMF then suspended disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation.

Aside from wanting the government to reduce its budget deficit, the IMF is pushing for it to move to a market-determined exchange rate regime.

The foreign exchange companies said on Wednesday that they had removed the cap for the sake of the country, because it was causing “artificial” distortions for the economy.

The drop in the official rate was the biggest since 1999 in both absolute and percentage terms, according to JS Global, a Pakistani brokerage house.

In the open market, the rupee weakened from 243 rupees to the dollar to 262, a drop of about 7%, having lost 1.2% the previous day, according to the Exchange Companies Association of Pakistan (ECAP) trade data.

Aside from moving towards a market-determined exchange rate, Islamabad has also announced it will take fiscal measures recommended by the IMF.

Attempts by Finance Minister Ishaq Dar to defend the rupee since his appointment in September, including reported currency market interventions, had run counter to the IMF’s advice.

The Pakistan Stock Exchange, however, reacted positively to the rupee’s fall, with the KSE 100 index shooting up more than 1,000 points, or 2.5%.

“The depreciation in the rupee takes away some uncertainty regarding the economic roadmap ahead and resumption of the IMF programme, which the market is responding positively to,” Tahir Abbass, Head of Research at Arif Habib Limited, said.