Rupee continues to post modest gains against dollar

• With an increase of 0.27%, the rupee closed at 174.30 against the US dollar in the inter-bank market.
• Analysts say the local unit gained ground as uncertainty regarding the IMF bailout ended.
• Per SBP, the rupee has depreciated by a further 3.4% since the last MPC meeting.

KARACHI: The rupee continued to slowly regain ground against the US dollar on Tuesday, with the local currency gaining 47 paisas compared to its previous close as the International Monetary Fund (IMF) confirmed the news of the successful conclusion of talks with Pakistan.

With an increase of 0.27%, the rupee closed at 174.30 against the US dollar in the inter-bank market compared with the previous closing of 174.77.

Analysts said the local unit gained ground as uncertainty regarding the IMF bailout ended, providing support to the local unit. This, according to them, also boosted the market sentiment.

Completion of the sixth review would make available $1 billion, bringing total disbursements under the Extended Fund Facility to about $3 billion and helping unlock significant funding from bilateral and multilateral partners.

Earlier, in its monetary policy statement, the central bank had addressed the issue of currency depreciation.

“The rupee has depreciated by a further 3.4% since the last MPC meeting,” it said, adding that the US dollar also appreciated against most emerging market currencies since May as expectations of tapering by the US Federal Reserve have been brought forward.

“However, the fall in the value of the rupee since May has been comparatively large. As other adjustment tools normalise, including interest rates and fiscal policy, pressures on the rupee should abate,” the central bank maintained.