KARACHI – Pakistani rupee gains massively against the US dollar in the interbank market on Tuesday, thanks to the Stand-By Arrangement (SBA) with International Monetary Fund (IMF).
During the first hours of trading, the local currency moved up by Rs12.35 against the dollar, which makes it around 4.5 percent in early trading. The embattled rupee is likely to go up against the greenback and was hovering at Rs273.
Meanwhile, the situation was not contrasting in the open market as the greenback suffered back-to-back losses against the rupee and it was currently being traded at Rs280. The high-flying dollar plunged by 10 rupees in the open market in the aftermath of the IMF deal.
On the other hand, other currencies like Euro also moved down in the open market and were now being traded at Rs305, GBP was down by Rs13 to Rs355, UAE Dirham suffered a loss of Rs6.30 to 72.70 and Saudi currency was down by Rs3.70 to Rs71.70.
Last week, the local currency recorded back-to-back gains against the US dollar to settle at 285.99.
On Monday, Pakistan Stock Exchange opened up over 5 percent or 2231 points for the first time in trading history. It even halted the market after its opening as the index hit the 5 percent upper cap limit imposed on stock prices.
Impressively, the market touched 43,721 points after the opening rally, experts said the move was anticipated in light of a financing deal with the US-based lender.
The money market regained confidence as the crisis hit the nation expected inflows from Saudi Arabia and United Arab Emirates (UAE).
Meanwhile, Islamabad expects $1.1 billion in funds under a new financing arrangement after the IMF’s board meeting.
IMF said the new SBA ‘builds on the authorities’ efforts under Pakistan’s 2019 EFF-supported programme which expired end June. This agreement is subject to approval by the IMF’s Executive Board, which is expected to consider this request by mid-July’.
The new deal is being lauded by economic experts and stakeholders, especially the business community, as lack of clarity on the fate of IMF programme was impacting badly the prospects for an improvement in economic conditions of the country and lives of the people.
