Pakistan's rupee up a third day

Karachi: Pakistan's rupee advanced for a third day to reach a seven-week high against the US dollar as the country obtained a $7.6 billion (Dh27.9 billion) bailout package from the International Monetary Fund (IMF) to help prevent the country defaulting on debt.

The State Bank of Pakistan, which this month raised its benchmark interest rate to 15 per cent from 13 per cent, has pledged to "further tighten monetary policy as needed," the IMF said in a statement in Washington on Monday. Pakistan will be able to immediately draw upon $3.1 billion of the loan, it said.

Ailing economy

The local currency strengthened 0.02 per cent to 78.86 (Dh3.69) per dollar as of 4.45pm in Karachi. It has dropped 22.2 per cent this year and touched 83.55 on October 17, the weakest since at least 1988, when Bloomberg started compiling data on the currency.

President Asif Ali Zardari needs IMF financing to prop up Pakistan's ailing economy. The nation's foreign-exchange reserves have shrunk 75 per cent in a year to $3.45 billion and economic growth is forecast to slump to a seven-year low.