PKR earns Rs 4.7 to $1 in interbank after news of $2.3bn rollover in China – Business

The rupee rallied further against the dollar on Thursday, gaining 4.7 rupees in the interbank market, with analysts attributing the move to news of a $2.3 billion loan from Chinese banks.

According to the Forex Association of Pakistan, the rupee appreciated by Rs4 to reach Rs206.50 at 12:37 pm from the previous day’s close of Rs210.50.

The rupee then closed at Rs207.23, appreciating by Rs4.7 from Wednesday’s close of Rs211.93, according to the State Bank of Pakistan.

Mettis Global Director Saad Bin Naseer said the rupiah correction was “long overdue”.

“With news of currency inflows from China and an impending agreement with the International Monetary Fund (IMF), we believe the rupiah will gain strength in the coming sessions,” he said.

“As inflows rise, we expect exporters – who have been withholding earnings overseas – to panic and hand over earnings due to the appreciation in the value of the rupee against the dollar,” he said. he added.

Komal Mansoor, head of research at Tresmark, said market sentiment had turned around on “the influx of positive news”.

“Exporters have also started selling dollars spot and forward. A gradual strengthening of the rupee will encourage them to sell more, thereby improving the liquidity position,” she said.

Analysts say some exporters are still waiting for real flows to materialize before taking action, she added.

Zafar Paracha, a currency trader, said today was “another good day for the Pakistani economy”. He predicted that the local currency would continue its recovery in the coming days.

He also projected that the price of the dollar would decline by Rs8-10 once the country receives the tranche from the Fund.

On Wednesday, Finance Minister Miftah Ismail said Chinese banks had signed an agreement for a loan of around $2.3 billion that would be paid into Pakistan’s account within days.

Since February, Pakistan has been seeking to roll over loans maturing very soon to support the State Bank of Pakistan’s fast-depleting foreign exchange reserves, which stood at $8.99 billion as of June 10.

At the same time, the government had also reached an agreement with the IMF on the federal budget for 2022-23, leading to the relaunch of the Extended Financing Facility (EFF).

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Post expires at 9:05pm on Monday July 4th, 2022