Rupee recovers on $300m Chinese financing

China was set to lend $300 million to Pakistan on Friday night and the much-needed inflow of financing would somewhat stabilise Pakistan’s foreign exchange reserves and defend the fast depreciating rupee against the US dollar.

Finance Minister Ishaq Dar wrote on his Twitter handle, “Out of Industrial and Commercial Bank of China’s (ICBC) approved facility of $1.3 billion (which was earlier repaid by Pakistan), SBP would receive back third and last disbursement on Friday in its account amounting to $300 million. It will shore up the forex reserves.”

With the receipt of $300 million, Chinese financing will amount to $2 billion in the past almost two months. This is in addition to the rollover of another $2 billion loan by Beijing.

The inflows have not only improved Pakistan’s forex reserves but have also provided support to the rupee.

The domestic currency maintained its uptrend for the third consecutive working day on Friday, regaining 0.18%, or Rs0.51, to a two-week high at Rs284.40 against the dollar in inter-bank market.

Cumulatively, in the past three days, the currency recovered 1.42%, or Rs4.03, compared to the all-time low of Rs288.43/$ hit on April 11, 2023.

Meanwhile, gold price hit a new all-time high at Rs218,600 per tola (11.66 grams) on Friday in line with the global trend.

Published in The Express Tribune, April 15^th, 2023.

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