Islamabad: Pakistan’s rupee surged on optimism that the International Monetary Fund’s bailout will boost demand for the nation’s assets.
The rupee advanced 4 per cent to 274.5 per dollar on Tuesday, according to the foreign-exchange desk at Arif Habib Ltd. as the local market reopened after a four-day holiday. Pakistan dollar bonds due 2031 climbed for an 11th day on Tuesday, with the notes trading at 48 cents on the dollar.
Stocks cheered the IMF deal with the biggest gain in 15 years on Monday, while dollar bonds have surged. Barclays 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.”