Open Market Sees Pakistani Rupee Strengthening Against US Dollar, Boosting Confidence

In a positive turn of events, the Pakistani rupee exhibited continued strength against the US dollar in the open market on Friday, accompanied by noteworthy improvements in the inter-bank market.

Comparing this to Thursday's rates of 286.5 for selling and 283.5 for buying, the stability in the open market is evident.

Simultaneously, the inter-bank market witnessed the rupee's upward trajectory against the US dollar for the fourth consecutive session, appreciating by 0.07% on Friday. According to the State Bank of Pakistan, the currency settled at 284.97, reflecting an increase of Re0.20.

The ongoing narrowing of the gap between rates in the inter-bank and open markets aligns with one of the structural benchmarks set by the International Monetary Fund (IMF), stipulating that the difference should be less than 1.25%.

This positive trend coincides with recent developments in the IMF Stand-By Arrangement (SBA) program. Earlier this month, the IMF staff and Pakistani authorities reached a staff-level agreement on the first review of the program, anticipating approval from the IMF’s executive board in December. The government is optimistic that the country's currency will see further improvement following the receipt of the second tranche from the IMF after its review.

In a parallel boost to confidence, the State Bank of Pakistan reported an increase in the country's total liquid foreign exchange reserves by $77 million, reaching $7.257 billion during the week ended November 24, 2023.