The Pakistani rupee appreciated by Rs15 against the US dollar on Tuesday in the interbank market, following the last-minute financial aid provided by the International Monetary Fund (IMF).
The Forex Association of Pakistan reported that the rupee was trading at Rs271 to a dollar at around 10 a.m., marking a significant Rs15 increase in value.
Komal Mansoor, Head of Strategy at Tresmark, forecasts a possible stabilization of the market around the 272-276 range for today, with the central bank’s role being crucial in guiding future currency levels.
Mettis Global Director, Saad bin Naseer, suggested that the growing foreign exchange reserves might induce panic among dollar hoarders, which could lead to a surge in remittances through banking channels.
Trading Day after IMF Agreement Marks Economic Stability
According to currency dealer Zafar Paracha, the recent IMF agreement has positively influenced the economy by restoring investor confidence, and he expects a subsequent rise in foreign investment. He believes the government should aim to lower the dollar rate and maintain stability. He pointed out that while Pakistan’s financial credentials are strong, there is room for improvement in management and suggested a review of government policies.
Read: Pakistan and IMF Agree on $3 Billion Stand-By Arrangement
Bank holidays resulted in a rupee cash shortage, allowing several money changers to buy dollars at their own rates ranging from Rs275 to Rs285 on Monday.
The first trading day following Pakistan’s Standby Agreement (SBA) with the IMF for $3 billion marked a sense of economic stability and a stronger rupee. However, due to bank holidays, few exchange companies had available rupee cash, and many couldn’t buy dollars despite high demand.
Exchange companies reported that they were only sellers with no buyers for dollars. The decision by the State Bank of Pakistan to allow banks to purchase dollars from the banking market instead of exchange companies has significantly impacted the open market business.
