The Pakistani rupee has ended an 11-day winning streak versus the US dollar.
During intraday trade on Wednesday, the Pakistani rupee ended an 11-day winning streak versus the US dollar, as the local currency corrected.
According to Forex, the rupee slipped 0.10 percent to 214 versus the US dollar in the interbank market as of 1:10pm, down from 213.90 at the close of Tuesday’s session.
Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company, told Geo.tv that there was “a bit of a correction” since the rupee appreciated “too much.”However, he stated that “things appear to be under control.”
The news comes as Finance Minister Miftah Ismail revealed on Wednesday that the government had returned the letter of intent (LoI) to the International Monetary Fund (IMF) after completing the pre-requisites, opening the way for the executive board meeting.
Pakistan’s rupee, bonds, and stocks have risen as investors hope the country will receive an IMF rescue this month and avert a default.
Dollar bonds due in December were trading about 95 cents on the dollar on Tuesday, up from a low of 85 cents in July, as investors increased their confidence that the debt would be serviced.
The rupee has risen 11% this month to 213.87 per dollar as of Monday, making it the world’s greatest gainer. The benchmark stock index rose 9%, making it Asia’s best performer after Sri Lanka.
Pakistan has implemented austerity measures in order to regain IMF approval to resume its stalled rescue package, as border countries ranging from Egypt to El Salvador face default.
Fitch Ratings and Moody’s Investor Service predicted in late July that Pakistan will receive $1.2 billion from the IMF, while Saudi Arabia is expected to renew its $3 billion deposit in aid, relieving Pakistan of financial pressure.
“After completing a slew of arduous earlier measures, Pakistan has gained staff-level permission to resume and extend its IMF programme, which should pave the path for board approval barring any policy errors,” said Patrick Curran, a senior economist at the London-based research firm Tellimer Ltd.
“With the programme back on track, Pakistan will have more time to avoid a disaster.”
