Rupee strengthens against US dollar and closes at 204.56

Author: Monitoring Desk

In the interbank market, the rupee closed the previous week up 1.3 percent versus the US dollar as Pakistan got closer to restarting its International Monetary Fund (IMF) programme. In addition, the IMF was considering combining the seventh and eighth reviews of the Extended Fund Facility (EFF), which would allow for an inflow of over $1.9b, according to Prime Minister Shehbaz Sharif and Finance Minister Miftah Ismail. The State Bank of Pakistan (SBP) foreign exchange reserves gained during the week as proof that a loan from Chinese banks had been deposited finally surfaced. As a result, during the week four sessions, the rupee strengthened, closing at 204.85 against the dollar. Although the current account deficit for May 2022 was close to $1.4b and oil prices were still rising, the appreciation still occurred. The two numbers are crucial for Pakistancurrency, which as lost roughly 14pc of its value only in 2022. News from the IMF front is likely to determine the direction of the currency market throughout the upcoming week.

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