It is being observed that the rupee is regaining its value against the dollar, as it gained Rs3 in the interbank market on Thursday. Many analysts attribute this development to the announcement of a $2.3 billion loan from Chinese banks.
According to the details, the local unit appreciated by Rs2.93 today morning in the interbank market on hopes that inflows from China are expected soon.
As per the Forex Association of Pakistan, the rupee in interbank was traded at Rs207.50 at 11:04am, which is better than the previous day’s close of Rs210.50. Mettis Global Director Saad Bin Naseer has stated that the rupee’s correction was “long due”.
Zafar Paracha, a currency dealer, said that today was “another good day for Pakistan’s economy”. He predicted that the local currency would continue its recovery in the coming days. Paracha attributed this to news of foreign exchange inflows from China and an imminent deal with the International Monetary Fund (IMF).
He added that as inflows rise, he expects exporters — who have been holding their earnings abroad — will panic and remit their earnings back in view of the appreciation in the rupee’s value against the dollar.
The Finance Minister also predicted that once Pakistan received the tranche from the Fund, the value of the dollar would decrease by 8-10 Rupees.
On Wednesday, Miftah Ismail announced that Chinese banks had signed an agreement to provide Pakistan with a loan of 2.3 billion dollars, which would be deposited into Pakistan’s account within a few days.
Pakistan has been working to renew its loans that are set to expire soon, in order to support the State Bank of Pakistan’s rapidly depleting foreign exchange reserves, which as of June 10th were at 8.99 billion dollars.
The government had also reached an understanding with the IMF on the federal budget for 2022-23, leading to the revival of the extended fund facility (EFF).
