A customer buys vegetables from a stall at a market in Karachi on July 3, 2023. (Photo by Asif HASSAN / AFP)
Pakistan’s rupee surged on optimism the International Monetary Fund’s bailout will boost demand for the nation’s assets.
The rupee gained 4% to 274.5 per dollar on Tuesday, according to according to the foreign-exchange desk at Arif Habib Ltd. as the local market reopened after a four-day holiday.
Concerns about a potential sovereign default eased after Pakistan struck a last-minute initial deal with the IMF for a $3 billion bailout last week.
Stocks cheered the deal with the biggest gain in 15 years on Monday, while dollar bonds have surged. Barclays Plc upgraded its rating on Pakistan’s dollar bonds to market weight.
"For Pakistan, the near-term default risk has substantially declined,” said Eng Tat Low, an emerging-market sovereign analyst at Columbia Threadneedle Investments in Singapore, "However, we remain cautious on a medium-term outlook.”
