KARACHI
Pakistani rupee strengthened against the US dollar in the inter-bank market by 72 paisas (+0.25 percent) on Tuesday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 286.71 against the dollar in the interbank market and closed at 285.99. However, the local unit remained stable against the greenback in the open market and remained unchanged. The rupee was quoted in the range of Rs288-291 against the US dollar in the open-market as compared to the same range a session earlier.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs80.10 against the US dollar in the interbank market, while it plummeted by Rs59.66 against the greenback in the current year.
The central bank on Monday jacked up its key policy rate by 100 basis points to a new record high at 22 percent in an emergent meeting to fulfil another demand of the International Monetary Fund (IMF) to revive its loan programme. The rate became effective from Tuesday. The rate hike supported the local unit against the US dollar.
Prime Minister Shehbaz Sharif during the day spoke with the chief of the global lender over the phone. Later in a statement, he said that Pakistan hopes a bailout decision from the International Monetary Fund will come in a day or two. Earlier, Sharif held a third meeting with IMF Managing Director Kristalina Georgieva in Paris in which he reiterated Pakistan’s commitment to complete the Fund’s programme. The managing director “appreciated” PM Shehbaz’s commitment to the country, according to a government’s statement.
With reserves at critical levels for the past several months, Pakistan is in dire need of an IMF bailout, without which it may default. Pakistan’s foreign exchange reserves currently stand critically low at around $3.5 billion, providing only a three-week import cover. Between July and December 2023, Pakistan is expected to repay another $4.5 billion in foreign debt, excluding loans that are anticipated to be rolled over and refinanced in the first half of the upcoming fiscal year.
On the other hand, the SBP data revealed that the official reserve assets, including foreign currency reserves, IMF reserve position, Special Drawing Rights (SDRs), gold and other reserve assets, stood at $8.86 billion as of May 31, 2023.
