Pakistani rupee may recover more value ahead of IMF board meeting – Newsfeeds.media

All eyes are on Monday’s central bank monetary policy meeting and the August 29 IMF board meeting.



The rupee, which has so far recovered 10.33% of its value against the US dollar in August, is expected to register further gains to end the month on a positive note after a significant decline in July. — Stock photo

Published: Sun 21 August 2022, 17:56

Last update: Sun Aug 21 2022, 9:55 PM

The Pakistani rupee is expected to recover more ground against the US dollar this week due to weak demand from importers, experts said.

Analysts and market insiders said the South Asian nation’s currency is expected to hold steady against the greenback and other major currencies. It will take inspiration from the central bank’s monetary policy meeting on Monday.

Forex traders and market experts are also bullish on the approval of disbursement of the International Monetary Fund (IMF) $1.12 loan tranche later this month. The IMF Executive Board will meet on August 29 to discuss and approve the relaunch of the $6 billion Expanded Fund Facility for Pakistan.

The rupee, which has so far recovered 10.33% of its value against the US dollar in August, is expected to register further gains to end the month on a positive note after a significant decline in July. It fell 0.31% against the dollar over the week and closed at 214.65 in the interbank market on Friday.

Samiullah Tariq, head of research at Pakistan Kuwait Investment, said the rupiah is likely to maintain an upward trend ahead of next week’s IMF board meeting.

“I think the rupiah should be stable around 210-215 to the dollar in hopes of receiving the loan disbursement of $1.17 by the end of the month. The government should also allow the opening and the withdrawal of LCs to smoothen the supply chain,” Tariq told the Khaleej Times.

“The currency will register more gains as it depreciated excessively last month,” he added.

Analysts said the central bank is expected to keep key rates at the current level of 15% for the next seven weeks. However, commercial banks expect interest rates to rise by 100 basis points to contain inflation, which hit a record high of 42% in the week ending Friday.

“The State Bank of Pakistan may raise rates in line with other central banks around the world as the benchmark consumer price index also hit a 14-year high of around 25% in July,” according to a banker.

The central bank raised the interest rate by 125 basis points at its previous meeting last month. It raised key rates by 800 cumulative basis points since September 2021 to 15% on July 7, 2022.

— muzaffarrizvi@khaleejtimes.com

Leave a Comment

Your email address will not be published.