The Pakistani rupee gained ground against the US dollar in interbank trading on Tuesday, rising by Rs2.59 to be quoted at 266.85.
This gain came after the local currency had seen a decline on the first day of the week, closing at 269.44 against the greenback.
The slight strengthening of the rupee has been attributed to ongoing talks with the International Monetary Fund (IMF) that have recently resumed virtually.
The government’s stringent measures to unlock crucial funding have also been a contributing factor.
Although the talks with the US-based lender did not result in a deal, and the visiting delegation of financial institutions left after 10 days of discussions, negotiations are expected to continue.
Experts believe that the resumption of talks with the IMF has been a primary reason for the slight strengthening of the rupee.
Pakistan, with a population of 220 million, is on the brink of a debt default, with the country’s foreign exchange reserves held by the central bank plunging to less than $3 billion.
The removal of an unofficial price cap on the exchange rate has led to the rupee nosediving to a record low.
In summary, ongoing talks with the IMF have been the primary reason for the Pakistani rupee’s slight gains against the US dollar in interbank trading.
While no deal has been reached, negotiations are set to continue. The country’s precarious financial situation, with dwindling foreign exchange reserves and a record-low rupee, has made the outcome of the talks with the IMF all the more crucial.