Pakistani rupee continues to gain against US dollar

The Pakistani rupee continued to gain for the third consecutive trading session in the interbank market on Tuesday, with the US dollar declining 60 paisas.

The US dollar closed at Rs198.46 before noon, a low from Monday’s closing rates of Rs199.06, according to the State Bank of Pakistan.

In the open market, the US dollar lost Rs1.10 to 198.3 from 199.4.

The rupee went into a recovery drive shortly after the government increased fuel prices by Rs30 per liter on Thursday in the first phase of a gradual end to subsidies on petroleum prices. The subsidies have only been withdrawn partially and the government may announce another hike in the petroleum prices.

The withdrawal of subsidies raised hope for successful negotiations between Pakistan and the International Monetary Fund (IMF) for the next loan tranche.

Although Pakistan would be getting only about $1 billion from the IMF, the revival of the $6 billion program is significant to salvage the country’s economic credibility.

Finance Minister Miftah Saturday told a virtual seminar that friendly countries were holding back loans for Pakistan until the country signs a deal with the Fund, according to a Bloomberg report Monday.

Earlier he openly confessed that the IMF had linked its loan with the removal of energy subsidies.

Economic experts have termed the government decision to slash subsidies as “better late than never” saying that had the step been taken earlier, the value of the US dollar would have decreased to Rs180 by now.

Currency rates

The following are interbank foreign currency rates against Pakistani rupee on Tuesday, May 31, 2022.