For the second straight day, the PKR strengthened against the dollar in the interbank market on Wednesday, earning Rs1.37.
The local currency increased by 0.63 percent to close at Rs218.75 per $1.
Separately, according to information provided by the Forex Association of Pakistan, the PKR was trading at Rs218.5 per dollar at 4:40 PM.
According to Exchange Companies Association of Pakistan (Ecap) General Secretary Zafar Paracha, when the International Monetary Fund (IMF) approved the delivery of a critical $1.1 billion loan tranche, demand for the dollar decreased and investor confidence was restored.
He continued by saying that the significant gap between the dollar rates in the open and interbank markets had shrunk and was likely to narrow further.According to Paracha, “it appears the rupee’s value can strengthen to 200 per dollar in the next days.” He also noted that dollar smuggling to Afghanistan had stopped due to tighter border controls.
The rupee strengthened, according to Alpha Beta Core CEO Khurram Schehzad, not only as a result of the IMF bailout but also as a result of foreign currency received as aid for flood relief efforts.
He said that the foreign exchange will release some of the burden on the economy.
IMF rescue
An official statement released late on Monday night claimed that the combined 7th and 8th reviews of a loan facility for Pakistan were completed by the IMF’s Executive Board, enabling an immediate delivery of $1.1 billion to the nation.
Additionally, the board authorised “rephasing and augmentation” of Pakistan’s access to the funds by SDR720 million ($934 million), bringing the total availability under the Extended Fund Facility to around $6.5 billion.
The restart of the IMF lending programme was expected to cause the rupee to appreciate significantly versus the dollar, according to economic stakeholders and currency dealers.
However, since exporters were permitted to sell their holdings, currency dealers at banks revealed that the State Bank of Pakistan was opposed to a severe depreciation of the dollar all at once.
