The Pakistani Rupee (PKR) halted losses against the US Dollar (USD) and posted gains in the interbank market today.
It appreciated by 0.14 percent against the USD and closed at Rs. 209.80 after gaining 30 paisas in the interbank market today. The local unit hit an intra-day high of Rs. 208.15 against the USD during today’s open market session.
The rupee closed in green against the dollar today after the International Monetary Fund (IMF) announced on Thursday that it has reached a staff-level agreement with Pakistan that would pave the way for the disbursement of $1.17 billion, and also increased the total loan size to $7 billion, subject to approval by the lender’s Executive Board.
Additionally, in order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023, but at the same time wants Pakistan to continue adherence to a market-determined exchange rate. This means that the State Bank of Pakistan (SBP) cannot intervene to provide a hedge against currency shortfalls.
Markets drove momentum even further after the Minister of Finance, Miftah Ismail, announced earlier that petroleum prices will be reduced today. In a statement, he said that the Ministry of Finance has already received a summary from the Oil and Gas Development Authority (OGRA), and the government does not want to delay the announcement until 15 July.
Miftah added that the IMF appreciates the current government’s efforts to reduce petrol prices.
Globally, oil prices moved lower on Thursday, a day after falling below $100 a barrel for the first time since April, as international investors focused on the prospect of a large US rate hike later this month that could stem inflation but at the same time hit oil demand.
Despite a tight physical oil market, Brent crude was down by 2.35 percent at $97.23 per barrel, while the US West Texas Intermediate (WTI) slid by 2.71 percent to $93.69 per barrel.
The PKR reversed losses against the other major currencies in the interbank market today. It gained 7 paisas against the Canadian Dollar (CAD), 42 paisas against the Australian Dollar (AUD), and 73 paisas against the Pound Sterling (GBP).
It also gained eight paisas against the Saudi Riyal (SAR), nine paisas against UAE Dirham (AED), and 28 paisas against the Euro (EUR) in today’s interbank currency market.