Pakistani rupees surges nearly 4% against the US dollar in trading.
The rupee was trading at 275.05 at roughly 11:45 am up Rs10.94. The rupee gained against the US dollar back-to-back last week, ending at 285.99. Due to the Eid vacations last week and a bank holiday on Monday, markets were closed.
Following the staff-level agreement on a nine-month $3 billion stand-by arrangement (SBA), Pakistan reportedly issued the International Monetary Fund (IMF) a Letter of Intent (LoI) with nine important assurances.
Separately, on Monday, Moody’s Investors Service stated that Pakistan’s new IMF agreement will promote macroeconomic stability.
In addition, Moody’s stated that while Pakistan’s economy will remain weak in the short term, longer-term reforms, particularly measures to increase revenue, must be implemented.
Meanwhile, according to experts, the currency market is reacting to the agreement between Pakistan and the IMF.
According to Waqas Kukaswadia, Deputy Head of Research at JS Global, “the market has shown positive enthusiasm in response to the government’s recent agreement with the IMF for a financial assistance plan worth $3 billion.”
After Pakistan failed to finish a $6.5 billion IMF Extended Fund Facility (EFF) program that was set to terminate on June 30, 2023, the IMF and Pakistan struck an agreement on a new $3 billion, nine-month SBA on Friday.
The new SBA is, nevertheless, viewed as a huge plus for the shattered economy that had a protracted delay in the renewal of the IMF program.
Globally, the US dollar depreciated 0.039% to 102.910 versus a basket of currencies after overnight data revealed that US manufacturing fell even more in June, reaching lows last seen when the country was still recovering from the COVID-19 pandemic’s initial wave.
