The Rupee gained Rs3 in the interbank market on Thursday, indicating that the currency is starting to appreciate versus the US dollar. The disclosure of a $2.3 billion loan from Chinese banks is credited by many commentators as the cause of this event.
The local currency increased by Rs2.93 this morning in the interbank market, according to the details, in anticipation of upcoming inflows from China.
The currency was trading at Rs207.50 at 11:04 am, up from the previous day’s close of Rs210.50, according to the Forex Association of Pakistan. The rupee’s correction was “far overdue,” according to Saad Bin Naseer, director of Mettis Global.
A currency dealer named Zafar Paracha declared that it was “yet another good day for Pakistan’s economy.” In the upcoming days, he anticipated that the local currency will continue to strengthen. This was attributed by Paracha to reports of Chinese inflows of foreign currency and a forthcoming agreement with the International Monetary Fund (IMF).
He continued by predicting that when inflows increase, exporters who have been keeping their profits overseas will worry and send their money home due to the strengthening of the rupee against the dollar.
The Finance Minister also anticipated that the dollar would lose 8–10 Rupees in value once Pakistan got the tranche from the Fund.
Miftah Ismail reported on Wednesday that Chinese banks have agreed to lend Pakistan 2.3 billion dollars, which will be paid into Pakistan’s account shortly after.
To maintain the State Bank of Pakistan’s fast-declining foreign exchange reserves, which as of June 10th were at 8.99 billion dollars, Pakistan has been attempting to renew its loans that are due to expire soon.
The extended financing facility was reinstated as a result of the government and IMF coming to an agreement on the federal budget for 2022–2023 (EFF).