The Pakistani rupee (PKR) reversed losses and reported gains against the dollar during interbank trade on Tuesday, rising as high as 264.75 against the greenback as bulls took over market movements following the government’s decision to hike taxes to appease the International Monetary Fund (IMF).
At close, the rupee appreciated by 0.79 percent and suspended movement at 267.34 after gaining Rs. 2.1 against the greenback.
The local unit was all green against the dollar and opened trade at 266 in the open market. By midday, the greenback went lower against the rupee to around 264. After 1 PM, the local unit was largely green against the top foreign currency before the interbank close.
Today’s gains come after talks between Pakistan and the IMF continued today to unlock the lender’s bailout of over $1.1 billion. The talks are focused on reaching an agreement on a reform agenda under the country’s $6.5 billion bailout package, which initially began in 2019.
It is worth mentioning that a staff-level agreement is imperative to unlocking the IMF cash, which would still need to be cleared by the lender’s Executive Board before the bailout release.
Money changers expect trends to offer clarity as soon as the government starts opening credit letters for arranging payments in dollars for stranded containers at ports. They said the PKR gained further ground after SBP announced punishment for foreign currency exporters who failed to declare proceeds on time, prompting fundamental discipline in the days ahead. For the duration of the ongoing financial year, the expectation is that the rupee will maintain its seesaw trajectory until policymakers implement new reforms that help normalize the market free-float.
Despite today’s welcoming gains, the rupee is still down over Rs. 35 since its record-breaking single-day drop of Rs. 25 in the last week of January after the currency was finally ‘freed’ against the US dollar in the inter-bank market. As per market trends and fiscal developments observed today, the PKR has managed to gain almost Rs. 2 for the first time this week.
The PKR was bullish against most of the other major currencies in the interbank market today. It gained 20 paisas against the Australian Dollar (AUD), 42 paisas against the Euro (EUR), 55 paisas against the Saudi Riyal (SAR), 57 paisas against the UAE Dirham (AED), and Rs. 1.18 against the Canadian Dollar (CAD).
Conversely, it lost 46 paisas against the Pound Sterling (GBP) in today’s interbank currency market.
