KARACHI – The Pakistani rupee is anticipated to sustain its recent gains against the US dollar in the upcoming week, buoyed by positive sentiment surrounding the economy after Pakistan received over $1 billion from the International Monetary Fund (IMF) as part of a larger $7 billion loan package, dealers and analysts reported.
The local currency witnessed a marginal but notable uptick against the dollar in the interbank market this week. Starting at 277.86 per dollar on Monday, the rupee strengthened slightly to close at 277.63 on Friday, reflecting growing confidence in the market following the IMF’s endorsement of Pakistan’s economic measures.
The IMF’s executive board approved the $7 billion, 37-month Extended Fund Facility (EFF) earlier this week, providing a crucial lifeline for the nation’s ailing economy. The approval triggered the immediate disbursement of $1 billion, which is expected to enhance Pakistan’s foreign exchange reserves and stabilize the currency in the near term.
Dealers echoed optimism about the rupee’s trajectory, attributing its resilience to the long-term IMF program, which is set to bolster investor confidence and shore up foreign reserves. “The IMF inflow will act as a catalyst for further rupee stability. With reserves climbing and foreign debt repayment fears easing, we anticipate the rupee to continue its modest appreciation against the dollar in the forthcoming days,” one dealer commented.
The State Bank of Pakistan’s foreign exchange reserves have already risen to $9.53 billion as of September 20, further solidifying the local currency’s position. The IMF’s inflow is expected to sustain this upward momentum, alleviating pressures on Pakistan’s external account and mitigating concerns over looming debt repayments.
In its recent statement, the IMF emphasized that the success of the EFF program will require stringent policies and sweeping reforms to address Pakistan’s structural challenges. The Fund stressed that these reforms are critical to achieving macroeconomic stability and fostering conditions for sustainable, inclusive growth. “Continued robust support from development and bilateral partners will be essential for Pakistan to achieve the program’s objectives,” the IMF highlighted.
The economy has shown signs of recovery, with growth rebounding, particularly in the agricultural sector, and inflation significantly easing to single digits. Tight fiscal and monetary policies have contained the current account deficit, while calm foreign exchange market conditions have allowed for a measured rebuilding of reserve buffers, offering further optimism for the rupee’s strength in the weeks ahead.
