KARACHI: The Pakistani rupee continued to appreciate against the US dollar in the interbank market, gaining 0.18%, or Re0.51, to settle at 284.40, following a gain of 0.60% the day before.
This positive trend coincides with the assurance by the United Arab Emirates to provide bilateral support of $1 billion to Pakistan as part of the stalled IMF bailout programme.
In addition, the Industrial and Commercial Bank of China Ltd (ICBC) has confirmed it will provide $300 million in funds to Pakistan, adding to the $1 billion already received from the Chinese institution.
Meanwhile, the US dollar struggled against major currencies, dropping to a two-month low, as traders anticipated an end to the Federal Reserve’s rate-hike cycle due to signs of cooling inflation. The producer price index (PPI) fell significantly last month, following moderation in consumer prices reported the day before. Oil prices rose on Friday on concerns over tightening supply, with the International Energy Agency’s monthly report expected to clarify the global demand outlook later in the day.
The appreciation of the Pakistani rupee against the US dollar is a positive development for Pakistan’s economy, as it makes imports cheaper and helps to lower inflation. This trend has been supported by a number of factors, including a reduction in Pakistan’s current account deficit, improved foreign exchange reserves, and the receipt of financial support from international partners like the UAE and China.
Pakistan’s IMF bailout programme has been stalled since November 2019, due to concerns over Pakistan’s ability to meet the programme’s conditions. However, the recent commitments from the UAE and China have been seen as a positive sign that the programme could be revived.
