PKR gains Rs 4.7 against dollar at the interbank after news of $2.3bn China rollover

The rupee further improved against the dollar on Thursday, with a gain of Rs 4.7 in the interbank market, analysts attributed the development Announcement $2.3 billion in loans from Chinese banks.

According to the Forex Association of Pakistan, the rupee gained by Rs 4 to Rs 206.50 at 12:37 pm, from the previous day’s close of Rs 210.50.

According to State Bank of Pakistan, the rupee later closed at Rs 207.23, with a strength of Rs 4.7 against Wednesday’s Rs 211.93.

Saad bin Nasser, director of Metis Global, said the rupee’s correction was “long overdue”.

“With news of foreign exchange inflows from China and an imminent deal with the International Monetary Fund (IMF), we are confident that the rupee will strengthen in the coming sessions,” he said.,

“As inflows pick up, we expect exporters – who keep their earnings overseas – to panic and return their earnings, seeing the appreciation in the value of the rupee against the dollar,” he said.

Tresmark’s Head of Research Komal Mansoor said market sentiment has taken a U-turn on the “inflow of positive news”.

“Exporters have also started selling dollars in spot and futures. Gradual strengthening of rupee will encourage them to sell more, which will improve the liquidity position,” he said.

He said analysts are of the view that some exporters are still waiting for actual inflows to complete before taking any action.

Currency dealer Zafar Paracha said today was “another good day for Pakistan’s economy”. He predicted that the local currency would continue to improve in the coming days.

He had also predicted that the dollar would depreciate by Rs 8-10 once the country gets the tranche from the fund.

On Wednesday, Finance Minister Mifta Ismail said that Chinese banks have signed a deal for a loan of about $2.3 billion that will be credited to Pakistan’s account within a few days.

Since February, Pakistan has been seeking a rollover of very soon-expiring loans to support the rapidly depleting foreign exchange reserves of the State Bank of Pakistan, which stood at $8.99bn as of June 10.

Also the government got it With the IMF on the federal budget for 2022-23, leading to the revival of the Extended Fund Facility (EFF).