According to the State Bank of Pakistan (SBP), the local currency gained Rs1.56 or 0.59% in the interbank market to close the day at 262.82 against the US dollar from Thursday’s close of 264.38. In the open market, the value of the rupee remained constant at 268.
This recovery can be attributed to an increase in the supply of dollars, as exporters sold their dollar holdings to benefit from lower rates. Additionally, remittance inflows have increased.
The government has taken the necessary actions to secure the stalled IMF programme, such as depreciating the rupee, raising the price of gas and electricity, and announcing a mini-budget that imposes new taxation measures with the goal of raising an additional Rs 170 billion during the fiscal year 2022-23.
As a result of meeting all known prerequisites for the lender based in Washington, the government is prepared for a staff-level agreement with the IMF. Depleting reserves and upcoming repayments on external fronts have forced the government into a corner, and the government is trying to get the IMF on board in the next day or two. As a result of IMF inflows, other multilateral institutions and friendly countries will be able to contribute.
Moreover, the foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $200 million in the week ended February 10 after a gap of three weeks.
Consequently, the consistent gains in the Pakistan rupee against the US dollar reflect the positive sentiment of investors towards the country’s economic prospects. The government’s efforts to secure the stalled IMF programme and increase foreign exchange reserves are crucial in supporting Pakistan’s economy and creating a stable environment for businesses and investors.