Chinese financing may help rupee claw back in upcoming week

As Pakistan reportedly secured financing from China worth $500 million amid a national financial crunch and economic woes, the rupee is expected to gain strength against the dollar in the coming week.

Similarly, authorities are hopeful to unlock the International Monetary Fund’s (IMF) much-awaited loan programme to cushion its crumbling economic base.

The financial markets of Pakistan witnessed the most turbulent week, enduring a 300 basis point hike in the policy rate, the devaluation of the rupee and a decline in sovereign bonds. Due to a delay in the resumption of Washington-based lender’s assistance, the national currency plunged 6.66% to a record low of 285.09 against the dollar on Thursday in the inter-bank market.

Yet when the central bank announced a larger-than-expected interest rate hike to rein in surging inflation, the local currency rebounded from a record low and finished at 278.46 to the dollar on Friday.

Now the central bank’s policy rate stands at 20%.

Courtesy Geo News