US dollar turns the tables on the Pakistani rupee
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After the IMF nod to revive the loan programme, the Pakistani rupee pounded on the US dollar in the interbank trading as the business started on Friday morning and scored a handsome gain. The Pakistani rupee wasted no time and soared past the greenback by Rs1.05.
However, the US dollar responded heavily, recovering all its losses and scoring a massive increase in its value of Rs1.15 as the trading ended on the last day of the week. The greenback ended the day at Rs210.95
After the confirmation by the IMF that it had reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eight reviews of the EFF-supported programme which would pave the way for the release of the much-awaited $1.17 billion, the market sentiments showed signs of positivity giving boost to the otherwise slumping rupee.
The new agreement follows months of deeply unpopular belt-tightening by the government of Prime Minister Shehbaz Sharif, which took power in April and has effectively eliminated fuel subsidies and introduced new measures to broaden the tax base.
"Pakistan is at a challenging economic juncture," Nathan Porter, who headed the IMF team, said in a statement, adding external factors and domestic policies were to blame.
Pakistan is desperate for international support for its economy, which suffers from poor revenue collection and dwindling foreign reserves to pay its crippling debt.
Reporter Ashraf Khan