Pakistani rupee gains sharply on IMF staff agreement

After Pakistan and the IMF reached a staff-level agreement, the Pakistani rupee (PKR) has significantly strengthened against the US dollar.

The State Bank of Pakistan reports that on Tuesday, the dollar was exchanged for 275.44 PKR in the interbank market.

The US dollar dropped Tuesday as the Pakistani rupee gained 10.55 PKR, or roughly 3.83 percent, versus the US dollar, according to data cited by the Xinhua news agency. The local currency last traded at 285.99 PKR on June 27.

After May 12 of this year, when the local currency increased by 13.85 PKR or 4.86 percent versus the US dollar, this is the largest day-over-day rebound since.

Last week, the IMF and Pakistan achieved a staff-level agreement on a $3 billion, nine-month Stand-By Arrangement that is subject to IMF Executive Board approval. The IMF Executive Board is anticipated to examine the accord by mid-July.

Market experts claim that the deal with the IMF created optimistic market attitudes that led to this significant rebound since the nation’s foreign exchange reserves had been declining during the previous months, which was causing the local currency to depreciate.

According to commentators, the IMF’s programme would address the problem of foreign reserves and may raise the cash-strapped nation’s international credit ratings, which would cause the local currency to gain even more over the next few days.