Rupee records massive appreciation against US dollar after Pakistan meets IMF conditions
Pakistan’s rupee made a significant gain against the US dollar in the inter-bank market on Wednesday with the currency dropping below the Rs227 level during intra-day trading. The massive appreciation comes as Pakistan met all prior conditions of the International Monetary Fund (IMF) and also reported a decline in imports that revived market sentiment.
According to the Forex Association of Pakistan, the rupee rose by Rs0.88 to Rs237.5 at 9:50 am today, which had closed at Rs238.38 the previous day.
Later, the dollar lost Rs11.38 and was being traded at Rs227 against the rupee, down from 238.38 from Tuesday’s close in the interbank.
FAP Chairperson Malik Bustan said that the International Monetary Fund (IMF) is expected to release the bailout package for Pakistan soon, due to which the rupee has been appreciating since Friday.
During the last 3 sessions, the Pakistani rupee has appreciated by Rs1.56 against the dollar, he said.
“The difference of Rs10 between the rates in the open market and interbank market due to the smuggling of dollars into Afghanistan has been equalised because of tighter security at the border,” Bostan said, adding that, “The transfer of dollars into Afghanistan has stopped, the effect of which has strengthened the rupee.”
He also pointed to the improvement in the rupee as July’s lower import bill has helped reduce the country’s trade deficit, which will in turn reduce pressure on the rupee.
The rupee also strengthened after the International Monetary Fund (IMF) said that Pakistan has completed the last precondition, increasing the levy on petroleum products, for the combined seventh and eighth reviews.