Rupee makes sharp recovery on IMF disbursement

KARACHI: The Pakistani rupee made a recovery of 89 paisas against the dollar on Thursday after the International Monetary Fund (IMF) board approved the disbursement of over $1 billion for Pakistan.

The exchange rate ended Rs175.52 to the dollar from the previous day’s closing of Rs176.41 in the interbank foreign exchange market.

The dealers said that the market’s sentiments remained positive during the day following the decision of the IMF executive board to release the next tranche.

The IMF executive board met a day earlier and approved the sixth tranche of Extended Fund Facility (EFF) of over $1 billion. This will take the IMF total disbursement under the EFF programme to $3 billion.

The disbursement of the sixth tranche will provide the much needed support to the foreign exchange reserves of the country.

The foreign exchange reserves of the country deteriorated sharply. Pakistan’s liquid foreign exchange reserves plunged by $866 million to $22.482 billion by the week ended January 21, 2022, as against $23.35 billion by the week ended January 14, 2022.

Analysts at Arif Habib Limited said that after the IMF endorsement, Pakistan is likely to get more funding from bilateral, multilateral and other sources.

Finance Minister Shaukat Tarin recently said that the government plans to raise $1 billion ESG compliant Eurobond next month.

The dealers said that the rupee might get further support as the latest number of import bills had shown a decline over the previous month after the imposition of measures introduced through the mini-budget.

The import bill in the month of January 2022, recorded a decline of 22 per cent to $5.9 billion, as compared with $7.58 billion in December 2021, according to data released by the Pakistan Bureau of Statistics (PBS).