The rupee recovered against the dollar on Thursday, gaining 4 rupees in the interbank market. Analysts attribute these developments to the announcement of a $2.3 billion loan from the Chinese bank.
According to the Pakistan Foreign Exchange Association, the rupee reached Rs206.50, rising Rs4 at 12:37 PM from the previous close of Rs210.50.
Saad Bin Naseer, Global Director at Mettis, said the rupee’s correction was “a long deadline”.
“I believe the rupee will strengthen at the next meeting with the news of foreign exchange inflows from China and an imminent deal with the International Monetary Fund (IMF),” he said. Serb.com.
“As the rupee appreciates against the dollar as the inflows increase, we expect exporters who have been holding imports abroad to panic and remit their imports,” he added.
Komal Mansoor, head of research at Tresmark, said the “influx of positive news” drove market sentiment a U-turn.
“Exporters have also started selling dollar spot and forward exchanges. A gradual strengthening of the rupee will allow them to sell more and improve liquidity,” she said.
Analysts believe some exporters are still waiting for real trends to materialize before taking action, she added.
Currency dealer Zafar Paracha said today was “a good day for Pakistan’s economy”. He predicted that the local currency would continue its recovery over the next few days.
He also predicted that if the country receives the tranche from the fund, the dollar will fall by 8-10 rupees.
Treasury Secretary Miftah Ismail on Wednesday said Chinese banks had signed a deal for about $2.3 billion in loans coming into Pakistani accounts within two days.
Pakistan is seeking a rollover of soon-expiring loans to support the rapidly depleting foreign exchange reserves of Pakistan’s central bank, which stood at $8.99 billion from February to June 10.
At the same time, the government reached an agreement with the IMF on the federal budget for 2022-23, leading to the revival of the Extended Fund Facility (EFF).