The Pakistani currency appreciated by Rs0.08 to Rs278.42 against the US dollar in the inter-bank market, continuing its upward trend for the second consecutive working day. This rise comes as the government accelerates efforts to meet the final condition required to secure the remaining portion of foreign financing for a new $7 billion International Monetary Fund (IMF) loan programme.
According to data from the State Bank of Pakistan (SBP), the domestic currency has cumulatively gained Rs0.24 against the greenback over the past two days.
The Exchange Companies Association of Pakistan (ECAP) reported that the local currency remained stable at Rs280/$ for the fourth consecutive working day in the open market. The improvement in the inter-bank market is attributed to reports that Finance Minister Muhammad Aurangzeb has reached an agreement with a Saudi bank to secure new financing of $1.2 billion. This financing will be used to import oil from Saudi Arabia.
Additionally, recent updates indicate that the government has formed a committee to reschedule $15.4 billion in debt over three years from Chinese independent power plants (IPPs) operating in Pakistan.
Government officials claim there is no direct connection between the potential Chinese debt rescheduling and the new IMF loan programme. However, the debt relief is expected to ease outflows from the country and provide support to the rupee against the dollar. Earlier, Aurangzeb approached several Middle Eastern banks to bridge a $2 billion foreign financing gap required for the current fiscal year, which began on July 1, 2024. This is in addition to the potential rollover of $12 billion in financing previously secured from friendly countries, including Saudi Arabia, the UAE, and China.
