Rupee depreciates 0.75% to Rs166.27

• Pakisan received $2.7bbn from the International Monetary Fund on Tuesday. 
• The Pakistani rupee last closed over Rs166 in September 2020. 
• Rupee expected to stay volatile with the IMF likely to resume the $6 billion loan programme for Pakistan next month. 

KARACHI: Pakistani currency depreciated by Rs1.07 or 0.65% against the US dollar to close at Rs166.27 in the inter-bank market on Wednesday, according to data released by the State Bank of Pakistan (SBP).

On Tuesday, the country received $2.7b billion from the International Monetary Fund (IMF) under its Special Drawing Rights (SDR) allocation to fight Covid-19.

Despite significant inflows, the local currency closed near an 11-month low of over Rs166 against the greenback.

According to Arif Habib Limited (AHL), the Pakistani rupee last closed over Rs166 in September 2020. Speaking to Geo.tv, AHL Head of Research Tahir Abbas said the currency is expected to appreciate around Rs161-162 in September.

The analyst also mentioned that with the receipt of $2.75 billion, Pakistan’s foreign exchange reserves are currently at an all-time high.

The country's foreign exchange reserves stood at $17.63 billion in the week ended August 13, 2021. Inflows worth $2.75 billion will help reserves touch the peak of $19.46 billion in October 2016.

Going forward, the currency is expected to stay volatile with the IMF likely to resume the $6 billion loan programme for Pakistan next month as both sides are likely to negotiate conditions of increasing energy prices and revenue collection.

Analysts also expect the rupee to depreciate by around 6% in the fiscal year 2021-22 against the greenback, closing in the range of 168-170. The rupee has depreciated by 8.73% since July.