Rupee gains 70 paisas viz dollar as recovery continues

KARACHI: Pakistani rupee showed strength against the US dollar for the second straight session and appreciated by 70 paisas (+0.35 percent) on Monday.
The State Bank of Pakistan said in a statement that the dollar opened at Rs199.76 in the interbank market and closed at Rs199.06. Within the open market, the rupee was traded at 200/201 per dollar against 200/201.5 a dollar a session earlier.
The local unit gained Rs2.25 against the US dollar in the last session on Friday after falling for seventeen consecutive days. Pakistan increased petroleum prices in a bid to resume the International Monetary Fund (IMF) loan programme. Prior to Friday’s gain, the local currency set 13 consecutive all-time new lows. The local unit shed Rs14.01 during the previous three weeks. Overall, the rupee has depreciated by Rs41.57 against the US dollar during the ongoing fiscal year 2021-22 and Rs22.15 during the current year 2022.
The IMF on Wednesday last emphasised upon Pakistan the urgency of “removing fuel and energy subsidies” to achieve programme objectives. The recovery in rupee’s value came after Finance Minister Miftah Ismail announced to increase prices of petroleum products by Rs30 per litre with effect from Friday. “The government is committed to reviving the IMF programme and putting Pakistan back on a sustainable growth path,” said Ismail.
The action is expected to be followed by a revival of the multibillion-dollar loan programme by the IMF, which has been on an eleven-month hold, while Pakistan needs over $7 billion to repay the foreign debt and finance the current account deficit over the next months. The IMF is now expected to release the next tranche of $1 billion soon.
China and Pakistan have reaffirmed their support for each other’s “core interests and major concerns” while vowing to further enhance economic and defence cooperation, while the Gulf Cooperation Council (GCC) has also agreed to explore further avenues to enhance bilateral trade and economic ties with Islamabad. The likely inflows will help improve the county’s foreign exchange reserves and improve its capacity to make international payments. The official foreign reserves have fallen to a critically low level of six-week import cover at $10.08 billion. – TLTP