CORRECTED-UPDATE 2-Pakistani rupee strengthens 2.38% versus dollar in interbank market

(Changes figure in headline to 2.38%) By Ariba Shahid KARACHI, Pakistan, March 3 (Reuters) - The Pakistani rupee on Friday strengthened 2.38% in interbank closing at 278.46 rupees against the dollar, a day after the central bank raised its policy interest rate by 300 basis points (bps) to 20%, trading data showed. The rupee , which fell more than 6% on Thursday, was trading at 275.5 against the dollar during the day, up nearly 3.5%, after the opening session. "The rupee may have appreciated over the governors statement in the analyst meeting where he says the IMF has not asked to match the border rate," says Mustafa Pasha, chief investment officer at Lakson Investments.

Pasha added that expectations of reaching a staff level agreement soon have shot up now that the government has floated the currency, withdrawn farmer/export subsidies, and imposed electricity surcharges.

He says, "On the other hand, it could be that the SBP has done a soft intervention or overseas Pakistanis decided to remit after seeing the rupee touch 286 against the dollar."

The value of the local currency has been depreciating amid delays in a funding deal with the International Monetary Fund (IMF), which is crucial for the South Asian's broken economy faced with a balance-of-payment crisis. The sides have been negotiating a policy framework since the start of last month to agree on measures to bridge the fiscal deficit ahead of an annual budget around June. A staff-level agreement is yet to be signed, which finance minister Ishaq Dar said on Thursday should be done by next week. If negotiations succeed, the IMF will issue over $1 billion to Pakistan, which is critical to unlock other bilateral and multilateral funding. A market-based currency exchange is one of several conditions the IMF has made to approve the funding. Moody's downgraded the crisis struck country unsecured debt ratings to ‘’Caa3’ from ‘Caa1’ on Wednesday. On Friday five Pakistani banks: Allied Bank Limited (ABL), Habib Bank Ltd. (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd. (UBL), were also downgraded to Caa3 from Caa1.
(Reporting by Ariba Shahid in Karachi and Asif Shahzad in Islamabad; Editing by Christian Schmollinger, Christopher Cushing and Louise Heavens)

Reuters

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

off-the-wire

CORRECTED-UPDATE 2-Pakistani rupee strengthens 2.38% versus dollar in interbank market

By Reuters

Reuters

Reuters

Gold is never going back to $2,000: 'That's history,' prices to 3x from here – Peter Schiff

‘Biggest economic shift since Nixon’: Major U.S. monetary policy changes coming in 12-36 months – Jack Mallers

Solid price gains for gold, silver after busy news weekend

India joins South Africa in denying BRICS currency plans after Trump’s 100% tariff threat

Silver prices breach $32/oz as bullish technicals and fundamentals suggest potential breakout