Rupee records gain, closes at Rs205 against dollar

KARACHI: Rupee staged a handsome recovery against US dollar on hopes that Pakistan and the International Monetary Fund (IMF) will soon reach a staff-level agreement despite more conditions put forward by the Fund.

A day earlier, Pakistan received the Memorandum of Economic and Fiscal Policies (MEFP) from the IMF for the combined seventh and eighth reviews after which the market expects to receive $2 billion instead of the scheduled $1 billion loan tranche.

The local unit was trading at Rs204 during intra-day trade, however, it closed at Rs205.12 against dollar with a fresh gain of Rs1.75, or 0.85 per cent, according to the State Bank of Pakistan.

Since the beginning of this fiscal year (July 1, 2021) to date, rupee has collectively dropped by a massive 30.20 per cent (or Rs47.58) compared to the previous fiscal year’s close at Rs157.54.

Analysts expect the local currency to close the fiscal year 2022-23 in the range of 202-205 on Thursday (today).

Speaking to Geo.tv, Pakistan-Kuwait Investment Company’s Head of Research Samiullah Tariq said the local currency recovered because of positive news from the IMF.

“Although the MEFP document received from the IMF has some tough conditions and hints towards further tightening, the market is hopeful that the government will accept those conditions after slight negotiations,” he added.

Arif Habib Commodities Managing Director and CEO Ahsan Mehanti said speculations were in favour of rupee, therefore, the market expects the currency to close FY22 near the 202 level. Rupee has maintained a downward trend for the last 13 months. It has lost 34.7 per cent (or Rs52.85) to date, compared to the record high of Rs152.27 recorded in May 2021.