PKR surges by Rs15 against US dollar following IMF deal

ISLAMABAD: On Tuesday, the Pakistani rupee experienced a significant gain of Rs15 against the US dollar in the interbank market. This boost followed the country’s successful acquisition of last-minute funding from the International Monetary Fund (IMF).

As reported by the Forex Association of Pakistan, the local currency had appreciated by Rs15 and was trading at Rs271 around 10 am.

Komal Mansoor, the Head of Strategy at Tresmark, predicted that the market might stabilize within the range of 272-276 for the day. However, she also emphasized that the central bank’s actions would play a crucial role in guiding the currency’s levels going forward.

Saad bin Naseer, the Director of Mettis Global, pointed out that individuals hoarding dollars would likely panic once foreign exchange reserves begin to increase. Consequently, there may be a surge in remittances through official banking channels, as the risky hundi-hawala system may become less attractive.

Due to bank holidays, there was a shortage of cash rupees, which provided an opportunity for some money changers to buy the dollar at rates ranging from Rs275 to Rs285 on Monday.

The first day of open market trading following Pakistan’s Standby Agreement (SBA) with the IMF for $3 billion brought a sense of economic stability and resulted in a better value for the rupee. However, due to the bank holidays, only a few exchange companies had cash rupees available, and even those were limited. Most companies were unable to purchase dollars despite the high demand for selling.

Exchange companies reported a lack of buyers for dollars in the open market, as many banks began purchasing dollars from the banking market instead of using exchange companies, following the State Bank of Pakistan’s decision.