Rupee rises against dollar

KARACHI: The Pakistani rupee gave up its previous session’s losses and closed stronger against the dollar in the interbank market on Friday, aided by a rise in foreign exchange reserves and positive sentiment surrounding the country’s economy, dealers said.

The rupee closed at 277.64 to the US dollar, up from 277.84 in the previous session.

In the open market, the rupee gained ground, trading at 278.62 per dollar, compared with 278.79 in the previous session.

Dealers said that a better dollar supply helped the local unit bounce back from Thursday’s losses. Additionally, the steady rise in forex reserves and reports that Islamabad is aiming for about $1 billion in a formal request for funding from the International Monetary Fund’s facility that assists low- and middle-income nations in mitigating climate risk raised investor confidence in the nation’s economic prospects.

The reserves held by the State Bank of Pakistan increased by $18 million to $11.04 billion as of October 18. However, the country’s forex reserves fell by $94 million to $16.017 billion. Similarly, the reserves of commercial banks dropped by $112 million to $4.976 billion.

On the sidelines of the IMF/World Bank autumn meetings in Washington, Finance Minister Muhammad Aurangzeb said that the nation’s foreign exchange reserves should reach $13 billion by the end of March. This would aid in commercial lending and potentially improve the country’s credit rating, Reuters reported.

Aurangzeb also disclosed that Pakistan is currently in discussions with the Asian Infrastructure Investment Bank regarding credit enhancement for a planned Panda bond. It is aiming an initial issuance of $200-250 million by the end of June.