Rupee gains against dollar

KARACHI: The Pakistani rupee rebounded from four consecutive days of losses to finish higher on Friday, driven by positive sentiment about the country’s economy.

Pakistan signed 27 MoUs worth $2.2 billion with Saudi Arabia across various sectors during a visit of the Saudi investment minister to Islamabad. The rupee closed at 277.63 per dollar in the interbank market, up from 277.79 on Thursday.

However, the rupee’s value remained unchanged in the open market, trading at 279.5 against the dollar. Analysts attributed the rupee’s recovery to optimism about Pakistan’s economy following a visit by the Saudi investment minister, who confirmed that the Reko Diq deal is in its final stages and is expected to be completed within a few weeks. Once finalised, this deal is anticipated to boost foreign direct investment in Pakistan significantly.

In another development, the International Monetary Fund (IMF), in a staff report on Pakistan’s $7 billion loan programme released on Friday, said that the functioning of the foreign exchange market in Pakistan has improved considerably, and the interbank-open market spread continues to be negligible.

Stronger policies and confidence, and relatively calm FX market conditions have enabled the State Bank of Pakistan (SBP) to conduct sizable FX purchases, which have helped double reserves, it said. According to the report, rebuilding reserves needs to continue, while the functioning of the FX market should be strengthened further.