The rupee is likely to see small gains in the coming week following the first IMF loan tranche

• The rupee closes the week at 277.63 against the dollar on Friday.
• The IMF program is expected to boost investor confidence.
• Foreign exchange reserves stood at $9.53 billion on September 20.

KARACHI: Pakistan’s rupee is expected to make small gains against the US dollar next week after the country received $1 billion from the International Monetary Fund as the first tranche of a $7 billion loan, The News reported on Sunday.

Last week, the local currency rose slightly against the dollar in the interbank market. It closed at 277.86 against the dollar on Monday, showed some gains and closed at 277.63 on Friday.

“We believe that the new, long-term IMF program will further boost investor confidence in the economy. Foreign reserves will rise rapidly as a result of the IMF disbursement, stabilizing the rupee and reducing external debt repayment fears,” said a foreign exchange trader.

“We expect the rupee to continue to strengthen slightly against the dollar next week,” the trader added.

Foreign exchange reserves of the State Bank of Pakistan (SBP) stood at $9.53 billion on 20 September.

The IMF, in its new statement issued on Saturday, said the new program will require sound policies and reforms to support the authorities’ continued efforts to strengthen macroeconomic stability, address deep structural challenges and create conditions for a stronger, more inclusive and resilient. development

“Continued strong financial support from Pakistan’s development and bilateral partners will also be critical to achieving the programme’s objectives,” it said.

“Pakistan has taken key steps to restore economic stability with consistent policy implementation under the 2023-24 stand-by agreement (SBA),” the IMF said. Growth rebounded supported by activity in agriculture, while inflation eased significantly to single-digit rates amid appropriately tight fiscal and monetary policies.

The subdued current account and calm foreign exchange market conditions allowed for the rebuilding of reserve stocks.