December 1, 2023

As the IMF saves Pakistan from default, the rupee appreciates

As the IMF saves Pakistan from default, the rupee appreciates

KARACHI: The much-anticipated bailout programme for Islamabad was renewed by the executive board of the International Monetary Fund (IMF), which caused the Pakistani rupee to appreciate versus the US dollar on Tuesday during intraday trade.In intraday activity on the interbank market, the rupee strengthened by 2.42 percent to 219.50 against the US dollar from Monday’s closing of 221.92.

Officials from the government said Monday night that the international lender has authorised the seventh and eighth evaluations of the $6 billion Pakistan initiative after months of frantic work.According to Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), the local unit will continue to appreciate and eventually fall to 200 in the coming days.Paracha emphasised that the government’s efforts to tighten its belt after the contract finally materialised after much delay resulted in an upsurge in smuggling.

The substantial regulatory taxes placed on imports, according to Paracha, led to an increase in the smuggling of commodities, which caused a shortage of dollars in addition to the smuggling of dollars to Afghanistan.Although the loan from the international lender was $1.1 billion, he pointed out that it would open the door for Pakistan to get more funding from other multilateral and bilateral organisations.

According to Paracha, foreign direct investment will rise as well, and she anticipates that the general economy will improve over the next few days.

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