Pakistani rupee gains Rs15 against US dollar in interbank after IMF loan nod
The Pakistani rupee experienced a significant gain of Rs15 against the US dollar in the interbank market on Tuesday following the country's successful acquisition of last-minute funding from the International Monetary Fund (IMF), reports the Dawn.
As reported by the Forex Association of Pakistan, the local currency appreciated by Rs15 and was being traded at Rs271 around 10am.
Khurram Schehzad, the CEO of Alpha Beta Core, attributed the decline in the dollar in the domestic market to the approval of the stand-by agreement with the IMF.
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Before the holidays for Eid and a bank holiday on Monday, the rupee had closed at 285.99 against the dollar on June 27, the Dawn report added.
Komal Mansoor, the Head of Strategy at Tresmark, predicted that the market might stabilize within the 272-276 range for the day.
During the bank holidays, several money changers took advantage of the shortage of cash rupees and purchased dollars at rates ranging from Rs275 to Rs285 on Monday.
The commencement of open market trading after Pakistan's Standby Agreement (SBA) with the IMF for $3 billion brought a sense of economic stability and led to a better price for the rupee. However, due to the bank holidays, only a few exchange companies had cash rupees available, and even their supply was limited. Most companies were unable to purchase dollars despite the high demand.
Exchange companies noted that there were only sellers and no buyers for dollars in the open market. Moreover, the State Bank of Pakistan's decision allowing banks to buy dollars from the banking market rather than exchange companies has significantly reduced the open market's business with banks.
