PKR stages a smart recovery

[SoulSpokesman]

PKR gains Rs4.7 against dollar in interbank after news of $2.3bn China rollover

Analyst says rupee's correction "long due", predicts that the local currency will strengthen in coming sessions.

www.dawn.com

The rupee was recovering against the dollar on Thursday, gaining Rs4 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 Rs4 to reach Rs206.50 at 12:37pm 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 told Dawn.com.

"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.

Komal Mansoor, head of research at Tresmark, said market sentiment had taken a U-turn on the "influx of positive news".

"Exporters have also started selling dollars in spot and forwards. A gradual strengthening of the rupee will encourage them to sell more, thereby improving liquidity position," she said.

Analysts believe that some exporters are still waiting for actual flows to materialise before taking any action, she added.

Zafar Paracha, a currency dealer, said today was "another good day for Pakistan's economy". He predicted that the local currency 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 Fund.

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 for 2022-23, leading to the revival of the extended fund facility (EFF).

Regards

 

[Shakuni Mama]

It will balance out for almost 4-5 days and then you will notice its fall back again. It is because of the dollars they are getting from IMF that gave PKR a boost to revive but it will go in upward trajectory moving forward.

 

[SBD-3]

The exchange depreciation was largely driven by the sentiment erosion in the market. As IMF and subsequent inflows hit, the Rupee should gradually settle back in 190s or even in 180s (If all inflows come in fast).

Now with money secured, there should be a focus on making structural changes to the economy to promote savings and discourage money flow into consumption and undocumented sectors like Real estate.

 

[Hyde]

The exchange depreciation was largely driven by the sentiment erosion in the market. As IMF and subsequent inflows hit, the Rupee should gradually settle back in 190s or even in 180s (If all inflows come in fast).

Now with money secured, there should be a focus on making structural changes to the economy to promote savings and discourage money flow into consumption and undocumented sectors like Real estate.

Hamare mulk main rupee sirf girta hai.. settle back nahi hota

This temporary recovery was expected after two big news from China and IMF but we will not have significant recovery as depreciation helps increase our exports and decrease unemployment

 

[SBD-3]

Hamare mulk main rupee sirf girta hai.. settle back nahi hota

This temporary recovery was expected after two big news from China and IMF but we will not have significant recovery as depreciation helps increase our exports and decrease unemployment

Two causes of depreciation
1-Long term fundamentally driven
2-Temporary Sentiment Driven

The recent losses of PKR were not driven by the fundamentals but rather sentiment as without IMF, Pakistan was pretty much on her way to become the next Srilanka.

And that's precisely why I said 190s and 180s, not 170s , the level of PKR before the current slide began.

 

[TheSnakeEatingMarkhur]

PKR gains Rs4.7 against dollar in interbank after news of $2.3bn China rollover

Analyst says rupee's correction "long due", predicts that the local currency will strengthen in coming sessions.

www.dawn.com

The rupee was recovering against the dollar on Thursday, gaining Rs4 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 Rs4 to reach Rs206.50 at 12:37pm 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 told Dawn.com.

"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.

Komal Mansoor, head of research at Tresmark, said market sentiment had taken a U-turn on the "influx of positive news".

"Exporters have also started selling dollars in spot and forwards. A gradual strengthening of the rupee will encourage them to sell more, thereby improving liquidity position," she said.

Analysts believe that some exporters are still waiting for actual flows to materialise before taking any action, she added.

Zafar Paracha, a currency dealer, said today was "another good day for Pakistan's economy". He predicted that the local currency 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 Fund.

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 for 2022-23, leading to the revival of the extended fund facility (EFF).

Regards

BC it went from 190 to 215 but now that is is back to 207 we will forget that it still has long way back ?

 

[koolio]

It's just a very temporary recovery, then it will start going downhill, this imported government has screwed the economy big time, PDM are too thick to run the country, they only care about selfish interests and greed.

 

[WotTen]

PDM are too thick to run the country, they only care about selfish interests and greed.

They have only two items on their agenda:

1. Remove all legal cases against them.
2. Neutralize Imran Khan forever.

Anything else, who cares?

 

[FOOLS_NIGHTMARE]

It's just a very temporary recovery,

How come?

hen it will start going downhill

Why?

this imported government has screwed the economy big time

In just a few weeks?

PDM are too thick to run the country

Really!

they only care about selfish interests and greed

Care to elaborate!

Remove all legal cases against them

You mean fabricated baseless cases.

Neutralize Imran Khan forever

I 100% agree with that.

BC it went from 190 to 215

Forgot to mention it went from 115-189 as well once upon a time.

 

[SoulSpokesman]

Well, if rumours are to be believed the IMF and GOP are in agreement to let the PKR depreciate further. While we cant be sure of that, what we can sure is that the PKR even if it depreciates over the next year or so will do so in a more orderly fashion and not witness the panic stricken rout we saw over the last few weeks.

Regards

 

[Falconless]

Tauba Tauba Tauba Daronomics is back.

 

[koolio]

How come?

Why?

In just a few weeks?

Really!

Care to elaborate!


You mean fabricated baseless cases.

I 100% agree with that.


Forgot to mention it went from 115-189 as well once upon a time.

How many times are you trying to convince me with your lies and deciet, what has the status quo done in the last 40 years?? Just admit it like a man imported government has fcuked up the economy in the span of 2 months.

What magic formula will PDM bring now to fix things even if they get a bailout from IMF and other international lenders to fix ailing economy.

 

[Jango]

Have the fundamentals of the economy changed?

NO

That's all you need to know.

 

[Ssan]

Wait for it. PKR will continue downwards slide. Yesterday, the PDM govt did fake news by claiming that they had biggest inflows in RDA but not revealing what the outflows were- similarly remittances are down a billion dollar month over month and this has forced Dawn news to claim false news too (how rupee gained yesterday even though it lost). They are doing the same thing they used to do in PTI govt where they spread false news- except here trying to spread good feel news except the reserves will continue to fall and dollars will dry continue to dry up.

 

[AZ1]