FILE PHOTO: A trader counts U.S. dollar banknotes at a currency exchange booth in Peshawar, Pakistan September 15, 2021. REUTERS/Fayaz Aziz//File Photo

The US dollar continues losing ground against the rupee in interbank trading on Wednesday morning as it fell by more than one rupee.

According to the Forex Association of Pakistan, the greenback depreciated Rs1.25 against the previous day’s close of Rs206 to reach Rs204.75 by around 11 am.

The FAP’s closing rate of the last session shows a difference of 87 paisa from that of the State Bank of Pakistan, recorded at Rs206.87.

Exchange Companies Association of Pakistan General Secretary Zafar Paracha attributed the international currency’s fall to the possibility of the International Monetary Fund (IMF) releasing two combined tranches of around $1.85 billion instead of the initially expected single tranche of around $1bn.

On Tuesday, Pakistan received the Memorandum of Economic and Fiscal Policies (MEFP) from the IMF for the combined seventh and eighth reviews of its $6 billion loan programme with Pakistan.

The MEFP contains certain prior actions that would be necessary for implementation before the IMF board takes up Pakistan’s case for approval and the subsequent disbursement funds.

According to the MEFP, Pakistan will have to take at least two more “prior actions” to secure the two combined tranches by the end of July or early August.

Moreover, Paracha said, the signing of a $2.3bn deal between Pakistan and a Chinese consortium of banks had also led to the rupee gaining strength against the dollar.

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