Pakistan economy starts to show first sign of revival: Report

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Pakistan economy starts to show first sign of revival: Report

KARACHI: Pakistani currency has started to bounce back against US dollar in a first sign of economic revival.

Pakistani Rupee hit a seven-week high at Rs138.78 against the US dollar in inter-bank market on Friday, according to the State Bank of Pakistan, after the country successfully mitigated the risk of default following receipt of $2 billion from friendly countries.

Simultaneously, the rupee revived to a four-week high at retail market to 139 against the greenback on Saturday, according to a forex website.

“The $2 billion inflows from the UAE and Saudi Arabia (on Thursday and Friday) has partially eased the panic at currency markets,” said a banker on condition of anonymity.

The receipts have surely improved the country’s foreign currency reserves from less than two-month import cover prior to the inflows. “The improvement is reflecting in currency markets,” he said.

With the latest inflows, the two Gulf countries deposited a total of $4 billion in the past three months under financial assistance packages totalling $6 billion to help stabilise Pakistan’s foreign currency reserves which, as of last week, dropped to a 57-month low of $6.63 billion.

Besides, speculation about receiving a similar assistance package from China also echoed in the market.

The inflows have eliminated chances of further devaluation in the rupee in the short-run, said the official.