Rupee strengthens

KARACHI: The rupee recouped the previous session’s losses to close higher on Wednesday after the International Monetary Fund agreed to complete the pending reviews for the release of $500 million to Pakistan under the extended fund facility.

The rupee closed at 159.26 against the dollar, compared with Tuesday’s closing of 159.54 in the interbank market.

In the open market, the rupee ended at 159.45 against the greenback, compared with the previous closing of 159.60. Dealers said the local currency gained, as the revival of the stalled IMF’s loan programme sparked positive sentiment among traders.

Traders were optimistic that potential inflows from the IMF would help boost the foreign exchange reserves and provide support to the domestic currency.

The IMF staff and Pakistan reached an agreement on a package of measures to complete second to fifth reviews of the reform programme under the extended fund facility.

The review’s completion would release $500 million to Pakistan. The agreement is subject to the approval of the IMF Executive Board.

The IMF also said that COVID-19 had temporarily disrupted Pakistan’s progress under the EFF programme. However, government policies and “COVID-related social spending” have been critical in supporting the economy. The IMF appreciated Pakistan’s ongoing progress in different sectors, including strengthening of the legal framework for NEPRA and OGRA and the SBP’s autonomy, as well as Pakistan’s progress in completing the FATF action plan.