The Pakistani rupee appreciated by Rs1.53 against the US dollar as interbank markets closed on Friday with analysts attributing the recovery to a rise in the central bank forex reserves and expectations that the government and the International Monetary Fund (IMF) would reach an agreement soon.
After sliding by 1.13 per cent a day earlier, the dollar closed at Rs280.77, gaining by 0.54pc, according to the State Bank of Pakistan.
Ecap Chairman Malik Bostan told Dawn.com that the dollar was expected to fall to the range of Rs270 once the government clinches the deal with IMF.
“Foreign exchange reserves have also started to stabilise, which has reduced the pressure on the rupee,” he added.
Zafar Paracha, general secretary of Ecap, was also of the opinion that the increase in SBP reserves and inflow from China had changed the trend in the market because of which people were encashing their payments.
“But we have to see that some national and international financial institutions influence the market at the time of payments,” he told Dawn.com, stressing that it was important for the dollar rate to have a consistent trend.
The instability, he added, created a negative impression of the country.
The State Bank of Pakistan (SBP) reported on Thursday that its reserves increased by $487m during the week ending March 3 to $4.301bn, while total liquid foreign reserves stood at $9.754bn.
The central bank’s reserves have witnessed a steep fall over the past year, falling from more than $17bn in February 2022 to below $3bn in early February this year.
However, the reserves have now edged higher to $4.3bn on the back of recent Chinese help of $1.2bn.
Separately, Finance Minister Ishaq Dar has said that the country was “very close” to signing the staff-level agreement with the IMF. However, the global lender has asked Pakistan to arrange $7bn for debt servicing during the current fiscal year before it releases the $1.1bn tranche.