KARACHI, Nov 17: Rising hopes for inflow of foreign exchange changed the exchange market sentiments and reduced speculations which strengthened the rupee significantly against the dollar on Monday.
The Saturday’s announcement on $7.6 billion IMF loan package for Pakistan supported the factors resisting the free fall of rupee and the local currency gained 35 to 40 paisas in the inter-bank market.
The dollar was traded at as low as Rs79.80 while it was at Rs80.20/25 on Saturday. This was a big slide of dollar which gained over 24 per cent since January 2008.
If the IMF board approves the agreement which is yet to be signed, Pakistan could get $4 billion in one year and that would fill the balance of payments gap.
The advisor to prime minister on finance had stated recently that the IMF loan would help Pakistan fill gaps (imbalances) of two years.
It was also announced that friends of Pakistan were ready to support, but they want endorsement of the IMF.
“The government’s announcement and IMF’s response largely impacted the market which cautiously moved in favour of rupee,” said Atif Ahmed, a currency dealer in the inter-bank market.
The currency dealers were cautious to predict about further recede of dollars against rupee, but said that the rupee may get more strength once dollars practically reach Pakistan and build the reserves.
“The speculative and panic elements will find it difficult to get place once reserves reach up to $12 billion and more,” said Atif.