KARACHI: Amid news of revival of IMF loan programme and flow of billions of dollars from China next week, the emboldened Pakistani rupee on Thursday tore through the US dollar and scored a massive gain of over four rupees.
On Wednesday, Pakistan government had signed a RMB 15 billion ($2.3 billion) loan facility agreement with a Chinese consortium of banks which was expected to aid the country’s depleting foreign exchange reserves and arrest the depreciation of the local currency.
As the intrabank trading opened on Thursday, the Pakistani rupee skyrocketed against the dollar, outclassing the greenback with a big margin of Rs4.43.
According to the forex dealers, the US dollar was now being traded at Rs207.50.
The US dollar closed the day on Wednesday at Rs211.93.
Finance Minister Miftah Ismail announced the development on his Twitter handle, revealing that the inflows are expected within a couple of days. “We thank the Chinese government for facilitating this transaction,” he said.
Pakistan is likely to receive the loan in couple of days. Pakistan is currently facing a huge problem of depleting foreign reserves with US dollar thrashing Pakistani rupee continuously as it touched historic high of Rs212 on Wednesday.
Pakistan is desperately trying to win an IMF deal but it is still looks a couple of weeks away from reaching consensus.
IMF’s Resident Representative to Pakistan Esther Perez Ruiz said the discussions between the International Monetary Fund (IMF) and Pakistan are underway and major progress has been made regarding the budget for the next fiscal year.
“Discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue,” Ruiz said.
On Tuesday night, Pakistan and the IMF evolved a broader agreement on the budget 2022-23 to revise upward the Federal Board of Revenue (FBR) target and slash down the expenditures to achieve a revenue surplus in the next fiscal year.
Pakistan and the Fund staff achieved substantial progress to strike a consensus on budget 2022-23 and now the IMF will share a draft Memorandum of Economic and Financial Policies (MEFP) on coming Friday or Monday.
In the next few days, the IMF and SBP will work out modalities on monetary targets, including further tightening of monetary policy, net international reserves and net domestic assets.
Miftah Ismail on Tuesday night had said “Pakistan and the IMF locked the budget details and achieved substantial progress on finalising budgetary targets for 2022-23″.
“Now the MEFP will be shared by the IMF soon,” the minister said. Miftah told Reuters: “I am also expecting the duration of the programme will be extended by a year and loan amount augmented.”
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