The Pakistani rupee continued to rise against the US dollar, gaining almost 0.38% in the early hours of Friday trade in the interbank market.
At 10:30 a.m., the rupee was quoted at 283.35, up Rs1.07 against the US dollar in the interbank market.
This comes a day after the rupee gained significantly against the US dollar, finishing at 284.42 in the inter-bank market after a gain of Rs3.43 or 1.21% on news that the IMF has received assurance from Saudi Arabia that it will assist Pakistan. Before resuming its rescue package for the South Asian country, the IMF wants such assurances.
Aisha Ghaus Pasha, Minister of State for Finance, announced on Thursday that Saudi Arabia has informed the lender that it will grant a $2 billion loan to Pakistan.
Pasha further stated that Islamabad was in talks with the United Arab Emirates (UAE) to acquire a guarantee for foreign reserve deposits in the central bank.
In another event, Finance Minister Ishaq Dar reminded US Ambassador Donald Blome of progress in talks with the IMF and emphasised the government’s commitment to completing the project.
“Comments from Saudi Arabia have led to a positive reaction by both currency and equities market,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, told.
“However, there are concerns that Finance Minister Ishaq Dar and his team will not travel to the United States to attend the IMF-World Bank spring meetings.” This has irritated market attitudes,” he continued.
Since early February, Islamabad has hosted an IMF mission to negotiate a series of policy steps to secure $1.1 billion in finance for the cash-strapped economy, which is at the point of collapse.
The funds are part of a $6.5 billion bailout package approved by the IMF in 2019, which analysts believe is vital for Pakistan to avoid defaulting on external payment obligations.
The agreement will also open up additional bilateral and multilateral finance channels for Pakistan, allowing it to shore up its foreign exchange reserves, which have slumped to four weeks’ worth of import cover, and help it avoid a balance of payment crisis.