KARACHI: Pakistani rupee strengthened against the US dollar for the fifth consecutive day, gaining 89 paisas (+0.51 percent) on Thursday.
The State Bank of Pakistan said in a statement that the dollar opened at Rs176.41 in the interbank market and closed at Rs175.52. The rupee witnessed a trading range of Rs1.06 during the session, showing the intraday high bid of 176.14 and low offer of 175.35. Within the open market, the rupee was traded at 176.50/177.50 per dollar.
The rupee has gained Rs1.46 during the last five sessions and Rs1.25 during this week. The local unit has appreciated by 99 paisas during the current year 2022 while it has devalued by Rs18.09 during the ongoing fiscal year 2021-22.
The main reason behind the recovery of rupee against the dollar was the revival of the International Monetary Fund (IMF) programme for the $6 billion extended fund facility (EFF) on Wednesday. A meeting of the IMF’s Executive Board approved Pakistan’s request for the completion of the sixth review and release of a $1 billion tranche. The next review (seventh) under the $6 billion EFF programme will be due in April 2022, while the last and final eighth review is expected to be done in September 2022. The disbursement brings Pakistan’s total draw against the EFF programme for budget support to about $3 billion. The programme was initially approved in July 2019.
Apart from the IMF tranche, the government secured $1 billion through a sukuk issue, which also made the local unit stable. The rupee has made notable gains on the back of shrinking trade deficit in January 2022.
According to experts, the rupee will continue to remain stable in the medium term as the macroeconomic condition of Pakistan is quite sustainable for local currency in the interbank. They, however, warned that the gradual increase in international oil prices may bring the rupee under pressure. – TLTP