Dollar to PKR: On IMF payout, the rupee recovers sharply

KARACHI: On Thursday, the Pakistani rupee gained 89 paisas versus the dollar after the International Monetary Fund (IMF) board authorized a transfer of more than $1 billion to Pakistan.

In the interbank foreign currency market, the exchange rate finished at Rs175.52 to the dollar, down from Rs176.41 the day before.

Following the IMF executive board’s decision to issue the next tranche, traders reported market mood remained upbeat throughout the day.

The IMF executive board had convened the day before and authorized the sixth tranche of the $1 billion Extended Fund Facility (EFF). The entire IMF allocation under the EFF program will now be $3 billion.

The sixth tranche’s release will offer much-needed help to the country’s foreign currency reserves.

The country’s foreign currency reserves plummeted dramatically. Pakistan’s liquid foreign currency reserves fell by $866 million to $22.482 billion in the week ending January 21, 2022, compared to $23.35 billion in the previous week.

Pakistan is expected to get extra finance from bilateral, multilateral, and other sources following the IMF approval, according to analysts at Arif Habib Limited.

The government wants to sell $1 billion in ESG compatible Eurobonds next month, according to Finance Minister Shaukat Tarin.

The rupee may get more support, according to traders, since the current number of import bills showed a decrease over the previous month after the application of measures enacted via the mini-budget.

According to figures supplied by the Pakistan Bureau of Statistics, the import bill in January 2022 was $5.9 billion, down 22% from $7.58 billion in December 2021. (PBS).