Rupee gains on expectations of a fresh loan tranche from IMF.
Analysts anticipate rupee will rise further.
KARACHI: October’s best-performing currency continued to gain against the US dollar Tuesday on expectations of a fresh loan tranche from the International Monetary Fund (IMF).
According to the State Bank of Pakistan (SBP), the local unit gained Rs0.24, or 0.11%, against the greenback in the interbank market, closing at 220.65 compared to Monday’s close of 220.89.
Rupee regained ground following a decline in the Real Effective Exchange Rate (REER) index in September and on expectations of a fresh loan tranche from the Washington-based lender.
REER index depreciated to 90.9 in September, compared with 94.4 in the previous month, the State Bank of Pakistan reported on Sunday. The REER index shows the rupee might strengthen further in the coming days.
In addition, the expectation that Pakistan would meet its obligations to pay off its foreign debt on schedule contributed to a surge in the price of Pakistani sovereign bonds, which helped buoy sentiments regarding the local unit.
Analysts anticipate that the rupee will rise further as soon as World Bank inflows begin coming in as well. Meanwhile, Prime Minister Shehbaz Sharif is in Beijing to hold talks on the rollover of Chinese loans, which now total $26.7 billion and include public and publicly guaranteed debt.
From Asia’s worst to best-performing currency
The Pakistani rupee had one of the strongest performances in Asia in October, rising by 3.3% against the dollar.
The Pakistani currency was closely followed by the Singapore dollar which appreciated by 1.38%, the Philippine peso (1.15%), and South Korean won (0.46%).
The rupee had a successful month. In October, the rupee value increased by 3.3%, said Topline Securities, which cited statistics from Bloomberg. The rupee was one of the best-performing currencies in Asia, it added.
After hitting historic lows in value in both July and August, the rupee suddenly began to appreciate in the final week of September. It started appreciating following the start of Ishaq Dar’s fourth term as Pakistan’s finance minister.
However, the local unit was under pressure on account of the political unrest brought on by the start of the PTI-long march towards Islamabad.
The rupee was able to gain ground thanks to Dar’s recent warning to speculators about currency manipulation and the decline of the REER.
KARACHI: The open market exchange rate between the US dollar and the Pakistani rupee (PKR) was Rs279.4 on February 07, 2025, with a selling rate of Rs281.1. The interbank exchange rate between the US dollar and the Pakistani rupee is Rs 278.45, according to Interbank.
There was no movement in the US dollar (USD) from the previous closure of Rs278.
Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.
Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.
With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.
In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).
Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.
The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.
The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.
According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”
The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.
Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.