KARACHI: The US dollar gained Rs1.21 against the Pakistani rupee in the interbank market on Monday.
The US dollar also witnessed an increase of Rs0.75 in the open market where it was being sold at Rs160.50.
With the increase, the US dollar was being sold at Rs160 in the interbank market.
Last week, Pakistan received the first tranche of a loan of $991.4 million from the International Monetary Fund (IMF) under the under Extended Fund Facility (EFF).
According to the State Bank of Pakistan (SBP), following the loan from the IMF, the country’s foreign exchange reserves now stand at above $15.0431 billion.
The IMF, among other things, requires the government to leave the rates to market forces of demand and supply. This means the central bank would not fix the rate to keep the rupee artificially inflated, something it did in the tenure of former finance minister Ishaq Dar.
Both traders and end users have been closely monitoring dollar rates since the present government’s started its term in August 2018. The dollar was trading at Rs124 when the PTI government was sworn in, but rose by more than 29% to its current value since then.
As Pakistan formally enters the IMF programme, the policy of market-driven exchange rates will remain in place. The State Bank of Pakistan will neither fix the exchange rate nor completely leave it to market forces, Dr Reza Baqir, the SBP governor, said at a recent press conference. “We will keep a close eye on its movement and intervene to avoid any speculative movement and volatility,” he said. Dr Baqir termed the regime to be a ‘market-based exchange rate system’.