Riding on the sentiment that Pakistan will be able to secure the IMF deal, the local unit was appreciated by Rs2.10 against the US dollar in the interbank trading on Tuesday, reported 24NewsHD TV channel.
According to data provided by the money dealers, the PKR hammered the greenback as the US dollar depreciated by Rs2.10 and closed at Rs267.
Yesterday, the PKR lost its gaining momentum which it got during the morning session and depreciated by 16 paisas. At the time of close, it was settled at 269.44 on Monday.
As Pakistan is locked in virtual discussions with the International Monetary Fund, the sentiments back home are positive as market is expecting that a deal will be signed between the two for the release of stalled tranche of $1.2 billion.
In compliance with the IMF conditions, The Economic Coordination Committee of the cabinet on Monday increased natural gas prices in the range of 16 per cent to 112.32pc with retrospective effect from Jan 1 for six months in a bid to raise an additional Rs310 billion from the majority of domestic and all other categories of consumers to secure the IMF deal.
Earlier, on Friday, the ECC approved imposition of a special financing surcharge of Rs3.39 per unit in average power tariff, in addition to quarterly tariff adjustments of up to Rs3.21 per unit for one year and recovery of pending fuel cost adjustments of up to Rs4 per unit for about three months.
Besides this, the ECC also okayed discontinuation of power tariff subsidies to zero-rated industries as well as the Kissan package with effect from March 1.
Pakistan which is facing a full-blown economic crisis and is in dire need to clinch the deal which would unlock assistance from the World Bank, Asian Development Bank and friendly countries including China and Saudi Arabia.
The IMF team visited Pakistan and held 10-day-long technical and police-level talks from Jan 31 to Feb 9. But the talks failed to reach an agreement. Later, the IMF released a statement indicating that virtual discussions would continue and that "considerable progress" was made on policy measures to address domestic and external imbalances.
As a prelude to the visit, the government of Pakistan abandoned the dollar peg last month, leading to a devaluation of the Pak Rupee by approximately 14% from January 26 to date.
Finance Minister Ishaq Dar announced in a press conference on Friday that an additional Rs170 billion in taxes would be imposed, the circular debt must be stopped, and energy sector reforms would be considered.
Some media reports suggest that government will implement the tax and non-tax measures demanded by the IMF as a prior action through a Presidential Ordinance.
The Topline Securities in its latest report said that it is expected that the Staff Level Agreement will be signed in the next few weeks.
Reporter Ashraf Khan