The PKR showed a strong recovery against the dollar in the interbank market on Tuesday, gaining Rs2.92 by 9:54am.
The local currency was valued at Rs219 per dollar at that time, according to the Forex Association of Pakistan (FAP), after increasing by 1.31 percent.
An official IMF announcement stated that the rupee’s recovery followed the completion of the combined 7th and 8th reviews of a loan facility for Pakistan by the IMF Executive Board, permitting an immediate disbursement of $1.1 billion to the nation.
The recovery of the rupee was seen as a “small adjustment” by Tresmark’s head of research, Komal Mansoor, because the release of the loan tranche had “mostly been factored in after the staff-level agreement.”
Given the supply chain’s constraints and the probability of rising interest rates, the analyst advised caution in the market.
The rupee’s value increased “substantially,” according to FAP Chairman Malik Bostan, on hopes that the IMF loan tranche and inflows from friendly nations will be received quickly.
He continued that doing so would stabilize both the foreign reserves and the exchange rate.
The IMF’s approval of the loan disbursement, according to Mettis Global Director Saad bin Naseer, was another factor in the rupee’s rebound. He predicted that if foreigners and Pakistanis living overseas donate money to flood relief efforts and remittances are received, the value of the rupee will stabilize in the following days.
On July 28, the rupee hit a record low of 239.94. After 11 straight sessions of recovery, it closed at Rs213.90 in the interbank on August 16. It began to decline once more on August 17, losing Rs. 802 up until yesterday.