Karachi October 25 2022: Pakistan Rupee gains for the second consecutive day after falling for the seven straight days against dollar in interbank on expectation of $1.5 billion inflows from ADB this week despite more than 30% increase in country’s Credit Default Swap.
The Asian Development Bank (ADB) on Monday signed an agreement with Pakistan to provide a $1.5 billion loan for budgetary support and help flood-related rehabilitation and reconstruction activities.
The loan, provided under ADB’s Building Resilience with Active Countercyclical Expenditures (BRACE) Program, will help fund the government’s $2.3 billion countercyclical development expenditure program designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.
Pakistan Rupee appreciate 68 paisa or 0.31 percent in interbank to close at 219.73 against yesterday closing of 220.41.
Moreover, In Open Market Rupee gains PKR 2 and is trading at 223 against dollar at PST 17:00 against yesterday closing of 225.0, according to Forex Association of Pakistan.
The U.S. dollar index, which tracks the currency against a basket of six major peers including the yen, British pound and euro, added 0.05% to 112.06.
Pakistan Credit Default Swap (CDS) jump 3,071 basis points on Monday to the historic high level of 5,282 basis points, according to data published by Bloomberg.
Pakistan International Sukuk with maturity of December 2023 is trading at 144.72 percent while Pakistan Government International Bond with maturity of April 2024 is trading at yield of 89.73 percent.
Pakistan will ask international lenders for billions of dollars in loans after devastating floods exacerbated the South Asian nation’s economic crisis, the Financial Times reported on Wednesday.
“We are not asking for any kind of measure [such as] a rescheduling or a moratorium,” the country’s Prime Minister Shehbaz Sharif told the Financial Times. “We are asking for additional funds.”
In September, the current account deficit (CAD) declined for the 3rd month in a row. It fell to $0.3bn, less than half the level in August. In Q1FY23, the CAD has fallen to $2.2bn from $3.5bn in Q1FY22, mainly reflecting a decline in imports, according to data released by State Bank of Pakistan.
Pakistan’s new finance minister, Ishaq Dar, told Reuters on Friday that he will seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, but will not pursue haircuts as part of any restructuring. The veteran finance minister said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s external financing needs estimated at about $32 billion after devastating floods.
