The rupee was recovering against the dollar on Thursday, gaining Rs3 in the interbank market, with analysts attributing the development to the announcement of a $2.3 billion loan from Chinese banks.
According to the Forex Association of Pakistan, the rupee appreciated by Rs3 to reach Rs207.50 at 11:04 am from the previous day’s close of Rs210.50.
Mettis Global Director Saad Bin Naseer stated that the rupee’s correction was “long due”.
“With news of foreign exchange inflows from China and an imminent deal with the International Monetary Fund (IMF), we believe the rupee will gain strength in the coming sessions,” he said.
“As inflows rise, we expect exporters — who have been holding their earnings abroad — will panic and remit their earnings back in view of the appreciation in rupee’s value against the dollar,” he added.
Zafar Paracha, a currency dealer, said it was “another good day for Pakistan’s economy”. He predicted that rupee would continue its recovery in the coming days.
He also foresaw that the price of the dollar would go down by Rs8-10 once the country receives the tranche from the IMF.
On Wednesday, Finance Minister Miftah Ismail said that Chinese banks had signed an agreement for about a $2.3 billion loan that would flow into Pakistan’s account within a couple of days.
Since February, Pakistan has been seeking a rollover of loans expiring very shortly to support the fast-depleting foreign exchange reserves of the State Bank of Pakistan that stood at $8.99bn as of June 10.
At the same time, the government had also reached an understanding with the IMF on the federal budget 2022-23, leading to the revival of the extended fund facility (EFF).