In the aftermath of securing last-minute funding from the International Monetary Fund (IMF), the Pakistani rupee exhibited a substantial gain of Rs15 against the US dollar in the interbank market on Tuesday.
As reported by the Forex Association of Pakistan, the local currency’s exchange rate appreciated to Rs271 around 10 am. It is worth noting that the rupee had closed at 285.99 against the dollar on June 27, with trading activities suspended due to the Eid holidays last week and a bank holiday on Monday.
This positive development follows a previous record-high exchange rate of Rs290.93 reached on May 11. Since then, the dollar has experienced a considerable decline of more than Rs23.
The anticipated 3 per cent appreciation of the rupee has been realised, but the sustainability of these gains will be verified in the days ahead. The government has indicated that the partial funds from the IMF deal will be disbursed by mid-July.
Additionally, the government has expressed confidence in securing approximately $4 to $5 billion from Saudi Arabia, the United Arab Emirates, and the Islamic Development Bank. These additional funds would contribute to resolving the dollar liquidity issues.
The strength and stability of the rupee are likely to be maintained if these payments materialise. However, any delays could potentially increase pressure on the currency.
According to the government’s projections, Pakistan’s reserves are expected to increase to $14 billion by August. Should this estimation hold true, it is anticipated that the rupee will stabilise around the range of 270 to 280, as suggested by experts.
