KARACHI: The Pakistani rupee on Thursday strengthened by more than 1% against the US dollar in interbank trade due to hopes for the revival of the IMF bailout.
This came after Saudi Arabia confirmed that it will provide financial assistance to Pakistan. The rupee closed at 284.42 against the US dollar in the interbank market, up by 1.2% or Rs3.43 from the previous day’s close.
Analysts consider this a positive development, and believe that the local currency will remain resilient in the coming days if inflows are ensured. The IMF has received confirmation from Saudi Arabia on $2 billion in additional deposits, raising hopes for an early signing of the agreement.
The foreign exchange reserves held by the State Bank of Pakistan stand at a critical level of $4.2 billion, which is barely enough to cover one month’s imports.
The Pakistani stock market also saw a positive trend on Thursday, with the benchmark KSE-100 index gaining over 800 points during the day’s trading session.
The surge in the stock market was mainly driven by the positive sentiments created by the strengthening of the rupee against the US dollar. Investors also seem to be optimistic about the progress in the IMF bailout talks and the potential inflows from friendly nations.
Analysts believe that the positive trend in the stock market is likely to continue in the short term, depending on the outcome of the IMF talks.
