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KARACHI: Pakistani rupee gained Rs2 in the inter-bank market during early morning trading on Friday, breaking the prolonged losing streak against the dollar, after the government rolled back the fuel subsidy to meet International Monetary Fund (IMF) bailout conditions. The dollar is being traded at around Rs200 in the inter-bank.
“The market will gradually stabilise. It will further get stable after Pakistan reaches staff-level agreement with the IMF,” said Samiullah Tariq, the head of the Research and Development Department of Pakistan Kuwait Investment Company.
Pakistan’s Finance czar Miftah Ismail on Thursday announced the government’s “tough decision” to remove the subsidy on petrol to meet the global lender’s bailout conditions. The current government continued to offer a 56 rupees per litre subsidy on petroleum products that the Pakistan Tehreek-e-Insaf government had fixed, causing an increase in inflation.
Tariq was of the view that increasing the petrol price by Rs30 will further support the investors’ confidence. He added that further increasing the price by Rs10-20, curtailing the subsidy altogether, will further boost trust.
“It will take three months, till August, for the country to become stable,” said Tariq, who is a graduate of the Institute of Business Administration. Whether or not Pakistan will receive financial support from friendly countries will also be made clear after the IMF approval.