The Pakistan rupee showed signs of improvement on Monday, strengthening by 0.10% against the US dollar in the interbank market. Closing at 278.11, the currency gained Re0.29 against the greenback. This positive development comes after a period of relative stability for the rupee, as it had been trading around the 277-279 mark for several months. The State Bank of Pakistan reported that the domestic currency settled at 278.40 against the greenback, only slightly lower than the previous week’s closing rate of 278.38.
In a significant announcement, the International Monetary Fund (IMF) revealed that a staff-level agreement (SLA) had been reached with Pakistan for a $7-billion, 37-month loan program. Aimed at promoting stability and inclusive growth, this new Extended Fund Facility (EFF) is pending approval by the IMF’s Executive Board and requires confirmation of financing assurances from Pakistan’s development and bilateral partners.
Market experts anticipate that this agreement with the IMF will play a crucial role in ensuring currency stability. Arif Habib Limited (AHL) expressed its expectation for the Pakistani Rupee (PKR) to maintain stability in the short to mid-term, attributing this positive outlook to the sentiment surrounding the new IMF program.
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Amidst global economic concerns, the US dollar strengthened on safety bids following the attempted assassination of former US President Donald Trump. This led to a cautious market mood, impacting trading across Asia. The dollar’s broad rise caused the euro to fall by 0.21% to $1.0887, while sterling declined by 0.18% to $1.2966.
Oil prices, a significant indicator of currency parity, remained steady despite downward pressure from a stronger US dollar and concerns about demand from China. The attempted assassination also prompted speculation about the impact of the upcoming US election on global markets and investments. As the dollar firmed amidst the prospect of a Trump victory, it made oil more expensive for buyers using other currencies, exerting pressure on oil prices. Despite these challenges, Brent crude futures held firm at $85.11 a barrel by 1000 GMT.
