PKR surges most in six months after IMF loan deal

July 15, 2024 (MLN): Pakistani rupee surged by most in over six months after the nation secured another $7 billion loan deal from the International Monetary Fund over the weekend.

The rupee jumped 40 paisa or 0.14% to 278 per dollar during intraday trade on Monday, the highest appreciation in percentage terms since January.

The new bailout is aimed at capitalizing on the hard-won macroeconomic stability achieved over the past year, the IMF said in a statement.

To buffer against shocks and build reserves, the State Bank of Pakistan (SBP) will maintain a flexible exchange rate and continue to improve the functioning of the foreign exchange market and the transparency around FX operations, the statement further added.

The successful achievement of a staff-level agreement with the IMF will create a favorable environment for financial inflows from other multilateral institutions, bilateral partners, and friendly countries, according to Arif Habib Limited (AHL).

These inflows are expected to contribute to an increase in the country's foreign exchange (FX) reserves and help alleviate any external pressures, AHL said in a report.

Additionally, the program will provide much-needed clarity and certainty regarding the economic roadmap alongside structural reforms for the next three years, it added.

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