Rupee makes nominal recovery after Pakistan strikes staff-level agreement with IMF

• Pakistan rupee makes slight gain against US dollar.
• Rupee closes at 209.80 against the dollar, up 0.14%.
• Local unit makes recovery against dollar on IMF news.

KARACHI: The Pakistani rupee made a nominal recovery against the US dollar in the interbank market on Thursday in response to the news of a staff-level agreement being reached with the International Monetary Fund (IMF).

Data from the State Bank of Pakistan (SBP) showed that the rupee closed at 209.80 against the dollar, up 0.14% from 210.10 — the previous close.

Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq told Geo.tv that with the announcement of the staff level agreement, "the sentiment in the currency market has improved as refinancing risk has significantly reduced".

News of Pakistan and the IMF finally reaching a staff-level agreement broke in the early hours on Thursday. It will pave the way for the release of $1.17 billion to support the country’s fragile economy.

Since the beginning of the last fiscal year (July 1, 2021), the rupee has dropped by a massive 33.17% (or Rs52.26) compared to the previous fiscal year’s close at Rs157.54.

Economists and analysts said that once Pakistan secures the IMF deal, it will not only bring in money from the Fund, but it will boost Pakistan’s chances of securing loans from friendly countries — which will lead to an increase in foreign exchange.

A statement from the IMF said a "staff level agreement" — which is still subject to board approval — will bring the amount dispersed under an extended fund facility (EFF) to $4.2 billion, which could increase to $7 billion and stretch until June next year.