KARACHI: The rupee is expected to remain stable next week as the currency market expects the approval of Pakistan’s bailout package by the Executive Board of the International Monetary Fund (IMF) on July 12.
According to a report published in The News, dealers said on Saturday that dollar inflows and outflows are likely to remain balanced.
The local unit price in the interbank market rose by 2.8 percent or Rs 8 on the weekly basis.
“Over the next week, the rupee is probably not going to change much. Banks that generate foreign currency (through exports and remittances) should match the amount of import payments before releasing it,” said an analyst. ” said one analyst.
“By using this strategy, the current account deficit is kept under control, and unrestricted imports are avoided,” the expert noted, adding that the State Bank of Pakistan (SBP) is actively monitoring the current account. Looks like it does.
Once funds are received from the IMF and friendly countries, it is possible that imports may be allowed more liberally.
However, as payments are being accepted faster, businesses are not facing significant import delays, according to the analyst.
Monetary experts expect that the IMF will likely approve the standby arrangement during its executive board meeting on July 12 and that $1.1 billion will be deposited in the State Bank account by July 18.
Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan, a leading opposition figure in Pakistan and a former prime minister, met the IMF team on Friday at his residence in Zaman Park, Lahore.
Khan expressed his support for a bailout deal with the global lender but sought guarantees of timely elections in the country.
The IMF said it was seeking support from Pakistan’s political parties, including Khan’s, for a new nine-month $3 billion standby arrangement and policies linked to the program ahead of the country’s fall elections.
“The market does not expect any sharp movement in the USD-PKR parity,” said Tresmark – a financial portal for treasury markets – in a note.
“Our last week’s estimate of 275-280 pending IMF approval and 282-287 after IMF approval still holds,” it added.
These views include potentially significant inflows through the IMF agreement, depreciation of the rupee on REER basis, high interest rates, continued import management, increase in foreign exchange reserves due to favorable current account deficit, and SBP. were based on the key objective of building reservoirs. fast
Pakistan’s foreign exchange reserves with the central bank increased by $393 million to $4.462 billion in the week ended June 30.
The country’s dollar bonds improved during the outgoing week. According to JS Global, following the positive response to the Pakistan-IMF agreement, the country saw a significant increase in its international bond prices, reflecting increased investor confidence.
“However, there has been a correction in bond prices and yields this week,” he said. “Bond prices are showing an average daily decline of 7% relative to current prices.”
On an aggregate basis, international bond prices rose an average of 26 percent since the recent low of June 23, 2023, JS Global said.
