The Pakistani rupee is expected to improve against the dollar mainly due to inflows from exporters and the expected approval of the International Monetary Fund (IMF) loan, according to a media report.
In the interbank market last week, Pakistani rupee lost 32 paisas to close at 176.24 to the dollar. The rupee had ended at 175.92 on January 17.
A foreign exchange trader commented that due to selling of dollars from exporters, lower import payments, and the likely approval of the $6 billion IMF Extended Fund Facility (EFF), the local currency is expected to appreciate.
Moreover analysts view two key events taking place that will impact the prices; the central bank’s monetary policy on Monday and IMF’s executive board meeting scheduled for January 28 to consider Pakistan’s request for the completion of the sixth review and the release of $1 billion tranche.
The State Bank of Pakistan (SBP) is expected to keep the policy rate unchanged at 9.75 per cent and financial markets see no change in the monetary policy this time.
According to a Tresmark report, “If the approval is granted by IMF, markets will witness a flurry of activities, including fresh bond issuance, multilateral engagements, more fiscal space generating a growth burst, expedited privatisations, relief from Financial Action Task Force (FATF), etc.”
In addition, the government is expected to issue a dollar sukuk in the international markets soon. Moody’s Investor Service assigned a B3 backed senior unsecured rating to the sukuk issuance.