Rupee gains ground for fourth consecutive session

 For the fourth straight day, the Pakistani rupee appreciated versus the US dollar as investor mood improved as a result of a sufficient supply of dollars on the market and expectations that the International Monetary Fund's (IMF) loan programme will resume.

The local unit increased by Rs1.56, or 0.59%, in the interbank market from Thursday's close of 264.38 to conclude the day at 262.82 against the US dollar, according to data from the State Bank of Pakistan (SBP). In the meantime, the open market value of the rupee remained constant at 268.

The increase in remittance inflows is also noted. Currency dealers credit this rebound to an enhanced supply of dollars as exporters are selling their dollar holdings to benefit from better rates.

The essential actions have been made by the government to safeguard the IMF programme that has stalled. In an effort to raise an additional Rs170 billion for the current fiscal year 2022–23, it has devalued the currency, raised the price of gas and electricity, and finally released a mini-budget with new taxing measures.

All known requirements for the Washington-based lender have been satisfied, giving the impression that the administration is ready for a staff-level deal with the IMF.

The government has been forced into a corner by declining reserves and impending obligations on foreign fronts, thus the centre is attempting to enlist the IMF in the next day or two. IMF inflows will open the door for inflows from allies and other international organisations.

Meanwhile, after a three-week pause, the State Bank of Pakistan's (SBP) foreign exchange reserves increased by more than $200 million for the week ending February 10.