KARACHI: The rupee appreciated against the dollar on Tuesday as the International Monetary Fund (IMF) approved $1.1 billion for Pakistan, dealers said.
The exchange rate registered a gain of 1.80 rupees to end at 220.12 rupees against the dollar compared to the previous day’s close of 221.92 rupees on the interbank foreign exchange market.
Dealers said IMF Board approval supported the rupiah during the day. It fell to an all-time low of Rs239.94 against the dollar on July 28, 2022.
The IMF Executive Board has completed its seventh and eighth reviews for Pakistan under the Extended Financing Facility (EFF), which is expected to release a tranche of $1.1 billion.
This will bring the total IMF disbursement under the EFF program to $3.9 billion and help support the country’s foreign exchange reserves.
In addition, to support program implementation and meet higher financing needs in FY23, as well as catalyze additional financing, the IMF Executive Board approved an extension of the EFF until June 2023 instead of September 2022. The board also approved increasing access by SDR 720 million ($1 billion), bringing total access to $6.5 billion.
The foreign exchange market has seen a continuous depreciation in the value of the rupee since the government lifted the import ban on luxury and non-essential items. In addition, international oil prices are also experiencing an upward trend.
On August 20, 2022, the government lifted the import ban on luxury and non-essential items. On May 19, 2022, it imposed this ban following a massive depreciation of the rupee and a significant depletion of foreign exchange reserves.
The country’s foreign exchange reserves fell by $91 million to $13.522 billion in the week ending August 19, 2022. The country’s foreign exchange reserves were $13.613 billion a week ago, the August 12, 2022.
The State Bank’s official foreign exchange reserves declined by $87 million to $7.81 billion in the week ending August 19, 2022, from $7.897 billion a week ago.
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