The Pakistani Rupee showed significant progress on Wednesday as it gained Rs1.09 against the US Dollar, closing at PKR 277.48 in the interbank foreign exchange market.
This upward trend can be attributed to positive factors such as the expected IMF loan agreement and a significant deposit of $2 billion by Saudi Arabia into the State Bank of Pakistan (SBP).
This generous contribution from Saudi Arabia is anticipated to play a vital role in enhancing Pakistan’s financial stability and economic growth.
READ MORE: Pakistani Rupee Makes Recovery Against US Dollar, Ends at PKR 278.57
Currency experts credit the recent rating upgrade of Pakistan by Fitch Ratings for this recovery. Fitch Ratings recently elevated Pakistan’s Foreign-Currency Issuer Default Rating (IDR) from ‘CCC-‘ to ‘CCC,’ indicating improved external liquidity and funding conditions. This rating upgrade has instilled confidence in investors and consequently strengthened the value of the Pakistani Rupee against the US Dollar.
Furthermore, experts remain optimistic about the future performance of the rupee, citing the country’s growing foreign exchange reserves. The State Bank of Pakistan (SBP) recently released data indicating a significant increase of $405 million in foreign exchange reserves within a week.
As of the week ending on June 30, 2023, Pakistan’s foreign exchange reserves reached $9.746 billion, marking a rise from the $9.341 billion recorded by the week ending on June 23, 2023.
READ MORE: Pakistani Rupee Sharply Decreases Against US Dollar
In addition to the increasing reserves, experts anticipate additional foreign inflows in the upcoming week, subject to the approval of a bailout package by the executive board of the International Monetary Fund (IMF).
Pakistan and the IMF have recently reached a staff-level agreement, outlining the provision of approximately $3 billion to Pakistan under a 9-month Stand By Agreement (SBA). If approved, this bailout package will further strengthen Pakistan’s position and have a positive impact on the value of the rupee.
These improving foreign exchange reserves and the potential approval of the IMF bailout package provide hope for further strengthening of the Pakistani Rupee in the near future. This positive development represents progress for Pakistan’s economy and signifies increased stability in the currency market.
READ MORE: Rupee Drops Against Dollar to PKR 277.90 on Weekend Demand
Investors and economists are closely monitoring these developments, anticipating their impact on various sectors of the economy. The recovery of the rupee against the US Dollar is expected to have a favorable effect on trade and investments, creating a conducive environment for businesses and individuals alike.
