The Pakistan rupee gained ground against the US dollar Wednesday as the market was hopeful of a positive outcome of the ongoing talks between the government and the International Monetary Fund (IMF).

In the interbank market, the rupee appreciated Rs2.95 or 1.08% against the dollar to close at 273.33, according to the State Bank of Pakistan (SBP), up from yesterday’s close of 276.28. Meanwhile, the local currency closed at 279 in the open market.

Islamabad began its formal talks with the global lender last month to discuss an economy-rescuing plan that also includes an instalment of a $1.1 billion loan payment from a $6.5 billion bailout package, which was designed to ward off Pakistan’s economic meltdown in 2019.

To meet the IMF’s demand for the much-needed loan, the government has already hiked up the price of petroleum products which will move the already record-high inflation upwards and increase the rates of power, gas and other commodities that are also in the pipeline.

The bailout package is critical for the nation of 220 million as the State Bank of Pakistan-held foreign exchange reserves are at a critical level of around $3 billion, for the week ended January 27, which is enough to cover imports for less than a month.