KARACHI: The rupee appreciated against the dollar on Tuesday, as the International Monetary Fund (IMF) approved an amount of $1.1 billion for Pakistan, dealers said.

The exchange rate witnessed a gain of Rs1.80 to end at Rs220.12 against the dollar from the previous day’s closing of Rs221.92 in the interbank foreign exchange market.

The dealers said the IMF Executive Board’s approval had supported the rupee during the day. It fell to the historic low of Rs239.94 against the dollar on July 28, 2022.

The IMF Executive Board completed its seventh and eighth reviews for Pakistan under the Extended Fund Facility (EFF), which is likely to lead to the release of $1.1 billion tranche.

This will take the total disbursement by the IMF under the EFF programme to $3.9 billion and will help support the foreign exchange reserves of the country.

Additionally, to support the programme implementation and meet the higher financing needs in FY23, as well as catalyse the additional financing, the IMF Board has approved an extension of the EFF till June 2023 instead of September 2022. The board also approved augmentation of access by SDR 720 million ($1 billion), bringing the total access to $6.5 billion.

The currency market witnessed a non-stop depreciation in the rupee value since the government lifted the ban on the imports of luxury and non-essential items. Besides, the prices of the international oil are also seeing a rising trend.

On August 20, 2022, the government withdrew the ban on the import of luxury and non-essential items. On May 19, 2022, it imposed this ban in the wake of a massive rupee depreciation and significant foreign exchange reserves depletion.

The foreign exchange reserves of the country fell $91 million to $13.522 billion by the week ended August 19, 2022. The foreign exchange reserves of the country were at $13.613 billion a week ago, i.e., August 12, 2022.

The official foreign exchange reserves of the State Bank witnessed a decline of $87 million to $7.81 billion by the week ended August 19, 2022 as against $7.897 billion a week ago.

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