Pakistani rupee recovered to 185.45 against the US dollar for the third straight day on Wednesday, as reports about revival of the International Monetary Fund (IMF) loan programme provided some stability to the market.
The State Bank of Pakistan said in a statement that the rupee opened at 185.62 against the US dollar in the interbank market and closed at 185.45 after gaining 17 paisas (+0.09 percent). Within the open market, the rupee was traded at 185/186.5 per dollar without any change.
The rupee has gained Rs1.30 against the dollar during the last three days. During the last week, the rupee shed Rs5.20 against the US dollar and slipped to 186.75 from 181.55. Overall, the rupee devalued by Rs28.02 against the US dollar during the ongoing fiscal year 2021-22 and Rs9 during the current year 2022.
According to experts, although there is stress on the economy, some stability is visible. Despite better exports, the current account deficit has surged to alarming levels and in order to address this challenge, there is a need to look at the agriculture sector and curtail needless imports, they added.
Currency dealers believe that the IMF statement, saying the Fund mission will visit Pakistan in May to resume discussions over policies for completing the seventh review has helped sentiment, as did the news of extending the stalled programme by up to one year and increasing the loan size to $8 billion from $6 billion. Traders and markets are looking at the IMF as progress with the Fund instils investor confidence in the economy, stabilises Pakistan’s foreign exchange reserves, and unlocks funding from other international financial institutions.
Besides IMF programme revival, expected $2.4 billion rollover from China and other foreign inflows would provide much-needed support to the balance of payments and the currency as well.