Rupee Gains 2nd Day in a Row Against US Dollar Amid ‘New IMF Demands’

The Pakistani rupee (PKR) gained further against the US Dollar during intraday trade today.

The Pakistani rupee was bullish during the early hours of intraday trade today with the interbank rate gaining Rs. 5 to reach 274 by 11 AM. By 11:25 AM, it had gained over Rs. 7 to top 272.

At close, the rupee appreciated by 0.19 percent and suspended movement at 277.92 after gaining 54 paisas against the greenback.

The rupee reported gains for the second day in a row today after the State Bank of Pakistan (SBP) on Friday received $500 million from the Industrial and Commercial Bank of China (ICBC), an inflow that will likely push the reserves held by the central bank to over $4 billion.

According to Finance Minister Ishaq Dar, more inflows from China are expected in the coming days.

More on money, the World Bank’s Resilient Institution for Sustainable Economy (RISE-II) has offered $950 million via the Asian Infrastructure Investment Bank (AIIB) only if the IMF is onboard. This comes after last week China refinanced two commercial loans totaling $1.2 billion in two installments of $700 million and $500 million. Chinese commercial banks will now re-finance two additional installments of $500 million and $300 million in the coming days.

The rupee is down almost Rs. 45 since its record-breaking single-day drop of Rs. 25 in the last week of January and has since then gradually parried small losses despite economic pressure. As per exchange rate movements witnessed today, the PKR has gained over 54 paisas today, recovering from last week’s plunge of 285.09 against the USD.

Money changers say clarity from talks with the International Monetary Fund (IMF) is helping market sentiments but further lapses may plunge it below 290 in case of an impasse.

Pertinently, IMF’s Resident Representative Esther Perez Ruiz said today Pakistan was committed to aligning its official and informal foreign exchange market rates, just days after the rupee collapsed to new lows. Ruiz added that one of the measures planned by Pakistani authorities to address energy sector debt is a permanent power surcharge on consumers.

She pointed out that the country needs to give assurances in advance that its balance of payments deficit is fully financed for the remainder of its bailout program with the lender.

The PKR was all green against most of the other major currencies in the interbank market today. It gained 14 paisas against the Saudi Riyal (SAR), 14 against the UAE Dirham (AED), 92 paisas against the Canadian Dollar (CAD), and Rs. 1.04 against the Australian Dollar (AUD).

Conversely, it lost 15 paisas against the Euro (EUR) and 62 paisas against the Pound Sterling (GBP) in today’s interbank currency market.

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