The Pakistani rupee on Tuesday closed unchanged against the US dollar in the interbank market as demand and supply reached equilibrium.
The local unit closed at 223.95 a dollar, according to the State Bank of Pakistan (SBP), which had finished the session at the same value on Monday — after depreciating Re0.01.
Currency dealers don’t see the rupee going far from the base as they are currently assessing the impact of the $500 million inflows received from the Asian Infrastructure Investment Bank (AIIB) on Tuesday.
Finance Minister Ishaq Dar confirmed that the SBP has received $500 million from the AIIB.
“Asian Infrastructure Investment Bank (AIIB) has transferred today, as per their Board’s approval, to State Bank of Pakistan/Government of Pakistan US $ 500 million as program financing,” tweeted the finance minister.Moreover, dealers said a delay in the arrival of a tranche of the IMF loan may weigh on the rupee-dollar parity in the days to come.
Pakistan and the IMF talks are continuing, with both sides yet to strike a broader agreement on a revised macroeconomic framework for the current financial year, reported The News, citing sources.
The lingering of the talks may delay the conclusion of the ninth review and release of the $1 billion tranche till the next calendar year 2023.
The SBP raised its benchmark interest rate by 100 basis points to 16% in an effort to tame high inflation. The SBP has confirmed that the $1 billion Eurobond repayment that is due on December 5 will be made on December 2.
“This repayment will not have any impact on foreign reserves as the funding has already been arranged,” it said. In addition, $7 billion worth of loan payments has also been rolled over.
Moreover, the Karachi interbank offered rate (KIBOR), a gauge of what banks charge each other to borrow the rupee, hits a record high on Monday, as the money market was surprised by the State Bank’s decisions to raise interest rates by 100 basis points.