Rupee makes sharp recovery as govt accepts IMF demands

KARACHI: The Pakistan rupee on Friday gained value against the US dollar in the intraday trading, just hours after the federal government reduced fuel subsidies and increased petroleum prices to reach a staff-level agreement with the International Monetary Fund (IMF), ARY News reported.

According to forex dealers, the greenback is trading at Rs199.50 after depreciating Rs2.51 against the local currency in the interbank market.

The dollar had closed at Rs202.01 against the rupee the other day.

Interbank closing #ExchangeRate for todayhttps://t.co/OX1iMNpVcS pic.twitter.com/6zIsY5CCas

— SBP (@StateBank_Pak) May 26, 2022

Meanwhile, the KSE-100 index gained more than 950 points and crossed the 43,000 threshold during the intraday trade. The market opened at 42,541.71.

Hike in fuel prices

The federal government on Thursday increased petrol and diesel prices up to Rs30 per litre to reduce fuel subsidies.

GOVT HIKES PETROL, DIESEL PRICES UP TO RS30 PER LITRE

Finance Minister Miftah Ismail made the announcement at a press conference. He announced to hike the petrol, diesel, light diesel and kerosene oil prices up to Rs30 per litre.

After the recent hike, the new price of petrol is Rs179.86 per litre, high-speed diesel (HSD) Rs174.15, kerosene oil Rs155.56 and light diesel Rs148.31 rupees.

Miftah Ismail had said the government was currently giving a subsidy of Rs56 per litre and so far bore Rs55 billion financial loss within 15 days.

Hike in electricity prices likely

The federal government has decided to hike electricity prices by Rs7 besides privatization of profitable public-owned DISCOs after talks with the International Monetary Fund (IMF) for the release of a US$1 billion tranche, it emerged.

According to sources privy to the matter, the hike of Rs 7 in electricity prices would include an increase in basic tariff and fuel adjustment charges. “The hike in power tariff will be applicable from July 01,” they said.

Moreover, the IMF has also expressed concern over the Rs2,600 billion power tariff and suggested the government immediately privatize the public-owned profitable DISCOs. It has further been suggested to handover loss-making DISCOs to provinces.