The Pakistani rupee gained in value against the US dollar immediately after the long-awaited International Monetary Fund’s (IMF) loan tranche was approved a day earlier by the lender’s executive board.
The rupee reached Rs220.12 after recovering Rs1.8 or 0.82 percent on Tuesday, according to State Bank of Pakistan (SBP).
According to experts and economists, the recovery in value of rupee was a minor correction as the release of IMF’s tranche had been ‘factored in following the staff-level agreement’.
Analysts have also advised the market to remain cautious because of the rising food inflation due to supply chain constraints and rising interest rates.
Malik Bostan, Forex Association of Pakistan’s chairman, told local media that rupee had risen significantly due to expectations over IMF’s loan tranche along with inflows from some friendly countries.
Market experts have also been hopeful of rupee stabilizing in the coming days mainly because of inflows of donations by overseas Pakistanis and other countries of the world for flood relief efforts.
IMF finally revived its Extended Fund Facility (EFF) program for Pakistan, after its executive board had given the approval of disbursement of $1.1 billion loan tranche for the combined seventh and eighth programs.
Rupee has continued to fluctuate for the past month. On July 28, it had reached a record-low value of Rs239.94. After July 28, the local currency started recovery till August 16 when it reached 213.90. However, after August 16, the rupee started a downward trend again till today, August 30.
