In response to news of progress in negotiations with the International Monetary Fund (IMF) for the financial assistance package, the Pakistani rupee increases against the US dollar on Thursday.
According to the State Bank of Pakistan, the local currency increased by Rs2.82 or 1.04% in the interbank market to settle at Rs270.5 against the US dollar (SBP).
As the market hoped for a successful result of the current negotiations between the government and the major lender, the rupee began to claw its way back.
The dollar has lost Rs8.7 overall this week in the interbank market.
Good Day
It was a “wonderful day for Pakistan’s economy,” according to Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP).
According to reports, the staff-level agreement between Pakistan and the IMF is getting closer, which is the key cause for rupee’s rise, according to Paracha.
The currency dealer claimed that the exporters who had held payments began encashment and the inflow of remittances from abroad Pakistanis had also started as other factors that caused the rupee to appreciate in the interbank market.
In the upcoming days, the economy will improve, and foreign direct investments will also be welcomed, according to Paracha.
Saad Ali, a capital market analyst, said that news of Qatar’s investments in state-owned assets brought on market optimism about economic stability and caused the rupee’s increase.
He concurred that the local currency had gained ground as a result of reports that IMF negotiations had ended successfully.
IMF and Pakistan Agreement
The draught MEFP, or Memorandum of Economic and Financial Policies, is anticipated by the Pakistani authorities from the IMF today.
Ongoing disagreements between the IMF and the Pakistani side on the need for external finance and losses in the electricity sector delayed the delivery of the draft memorandum.
Today marks the end of the nine review’s projected completion period. A staff-level agreement took a long time to reach even after receiving the draught MEFP document and nine tables, keeping in mind the most recent evaluations conducted by the Pakistani side with the IMF under the Extended Fund Facility (EFF), which is still in effect. However, the Pakistani authorities claim that the IMF mission has changed its working method and will now finalise the deal before sharing the MEFP with Pakistan.
However, “On the reform actions and measures, there is broad agreement. The mission commander also met with the finance minister to brief him on the discussions, according to a statement from the finance ministry. It stated that the Mission was assembling everything and would complete the MEFP.