BACK

Rupee hits 5-month peak on IMF deal

Our Correspondent
Thursday, Mar 21, 2024

KARACHI: The rupee on Wednesday rose to a five-month high due to positive sentiments after the International Monetary Fund and Pakistan reached a staff-level agreement on the second and final review of a $3 billion loan programme.

In the interbank market, the rupee settled at 278.4 to the US dollar, its highest closing level since October 17, 2023. The local currency had ended at 278.6 on Tuesday. The rupee gained 3 paisas to close at 281.12 per dollar in the open market.

Dealers said the rupee gained ground owing to prevailing positive sentiments in the market caused by the IMF deal and improvement in the current account surplus. The IMF staff and the Pakistani authorities reached a staff-level agreement on the second and final review under the stand-by arrangement, which is likely to lead to the release of the final $1.1 billion tranche subject to the approval of its executive board next month.

In its statement, the IMF staff said that Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners.

Pakistan posted a current account surplus of $128 million in February, compared with a deficit of $303 million a month before. The current account shortfall was $50 million in February 2023. The current account deficit for the eight months of the fiscal year 2023-24 narrowed to $1 billion from $3.8 billion a year ago.