On Thursday, the interbank market saw the Pakistani rupee recover 1.26% (or Rs3.60) to Rs284.25 against the US dollar, putting an end to its four-day losing streak.
This recovery was partially due to a financial commitment of $2 billion for Pakistan from Saudi Arabia, confirmed by the International Monetary Fund (IMF), which helped the rupee regain some of its value against the greenback.
The IMF had made the financial commitment a requirement for resuming its $6.5 billion loan programme for Pakistan.
With this requirement fulfilled, the IMF is now able to issue a loan tranche of $1.1 billion, and other global creditors who had committed around $9 billion in flood relief in Geneva in January 2023, would also unlock financing worth multi-billion dollars.
These receipts will improve Pakistan’s foreign exchange reserves, reduce the high risk of default on external debt repayment, and provide support to the rupee against the US dollar.
Also Read: Rupee Hits All-Time Low Against USD
According to experts:
The Pakistani rupee will continue its gains, as Pakistan has met another World Bank condition to qualify for a $450 million loan, which will help bridge a $6 billion financing gap.
Additionally, other friendly countries are also expected to fulfill IMF expectations and offer new debt to Pakistan.
State Bank of Pakistan (SBP) Governor Jameel Ahmad stated on Tuesday that Pakistan’s foreign exchange reserves would exceed $10 billion within three months, by the end of June, once the government achieves staff-level agreement with the IMF. Currently, the reserves stand at $4.24 billion.
The day before, the rupee had experienced a record high closing at Rs287.85 per USD, losing 1.5% (or 4.19) compared to the previous day. In the past six weeks, friendly countries had already refinanced loans worth $1.7 billion.
