The rupee strengthened by Rs14.93 in the interbank market, a day after hitting a record low against the dollar, it emerged on Friday. The local currency was being traded at Rs284 in the early morning trade.

The development comes a day after the rupee fell by Rs8.78 in the interbank market, following the political developments and Moody’s prediction on Pakistan’s economic state.

PTI Chairman Imran Khan’s arrest, which led to violent protests in the country, was ruled illegal by the Supreme Court on Thursday. The demonstrations further deepened political instability in the country as protesters attacked state buildings.

Grace Lim of Moody’s Investor Service earlier this week said that Pakistan’s financing options beyond June were highly uncertain. She added Pakistan could default given its very weak reserves without an IMF programme.

But Finance Minister Ishaq Dar reiterated on Thursday that Pakistan, with or without the International Monetary Fund, would not default and shall fulfill all external obligations in a timely manner.

“There is a plan for foreign payments of $3.7 billion in May and June and the country would not default,” he told reporters at the third Islamabad Security Dialogue. “China is expected to roll over another $2.4 billion.”

He added that the budget would be presented on June 9, 2023, and stressed that there should be no discussion about the country’s default. “Pakistan has sought help from friendly countries.”

Pakistan has told the IMF it will not implement a fuel subsidy programme as the two sides negotiate a long-delayed $1.1 billion bailout for the country, Bloomberg News reported on Thursday.

Prime Minister Shehbaz Sharif in March proposed charging affluent consumers more for fuel, with the money raised used to subsidise prices for the poor who have been hit hard by inflation.

Pakistan has committed not to implement the cross-subsidy programme, an IMF spokesperson told Bloomberg. The government also will not introduce new tax exemptions and will “durably allow” a market-based exchange rate for the rupee currency, the IMF told Bloomberg.