Rupee Ends Dramatic Week With Gains Against US Dollar Despite No Deal With IMF

The Pakistani rupee (PKR) surprised markets and gained further against the dollar during interbank trade on Friday, rising as high as 266 against the greenback despite Pakistan and the International Monetary Fund (IMF) being unable to reach a staff-level agreement.

At close, the rupee appreciated by 0.46 percent and suspended movement at 269.28 after gaining Rs. 1.23 against the greenback.

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The local unit was all green against the dollar and opened trade at 269.25. in the open market. By midday, the greenback stayed even lower against the rupee to around 266.925 After 1 PM, the local unit was still bullish against the top foreign currency before the interbank close.

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Today’s gains come after talks between Pakistan and the IMF concluded on Thursday but the two sides are yet to reach a staff-level agreement.

Finance Minister Ishaq Dar confirmed earlier today that Pakistan had received a Memorandum of Economic and Fiscal Policies (MEFP) along with a Letter of Intent from the International Monetary Fund (IMF). He also announced Rs. 170 billion in additional taxes to complete the lender’s program and receive over $1.1 billion in the bailout.

The IMF statement said that onsiderable progress was made during the mission on policy measures to address domestic and external imbalances. Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.