Pakistani rupee significantly strengthens after staff-level IMF deal

Islamabad, July 5 (IANS) The Pakistani rupee (PKR) has gained significant strength against the US dollar following the country's staff-level agreement with the International Monetary Fund (IMF) .

In the interbank market on Tuesday, the greenback was traded at 275.44 PKR, according to the State Bank of Pakistan.

The US dollar closed at 285.99 PKR on June 27, and it went down on Tuesday after the local currency appreciated by 10.55 PKR or about 3.83 per cent against the greenback, Xinhua news agency reported citing official figures.

This is the highest day-on-day recovery after May 12 this year when the local currency appreciated by 13.85 PKR or 4.86 per cent against the US dollar.

The IMF and Pakistan reached a staff-level agreement last week, on a nine-month Stand-By Arrangement in the amount of around $3 billion , which is subject to approval by the IMF Executive Board, with its consideration expected by mid-July.

According to market analysts, the agreement with the IMF generated positive sentiments in the market, which caused this strong recovery as the country's foreign exchange reserves have been shrinking in the past months, which was resulting in the devaluation of the local currency.

The analysts have said that IMF's program is going to improve the foreign reserves issue and would potentially increase the cash-strapped country's credit ratings internationally, which would result in the further strengthening of the local currency in the coming days.