Financial markets to greet Saudi assistance; rupee to recover
Pakistan to negotiate a smaller loan facility from IMF with less stringent conditions
KARACHI (Dunya News) – After a long time Pakistani financial market heard a positive news which would help end speculation at the foreign currency market, boost sentiment of the local bourses and help ease balance of payment situation.
Pakistan government overwhelmed following the decision of Saudia Arabia agreeing to give US$3 billion for balance of payment position and another US$3 billion deferred oil payment facility for year.
Both developments would ease down pressures on financial market. Currency market likely to see some improvement in value of domestic currency against greenback. Likely hood that the rupee to recover by at one to two rupees. It will end speculation of rupee weakening while the stock market which almost 700 points in last two sessions will see some recovery.
Topline Securities chief executive officer Mohammed Sohail said that Saudi Arabian cash and deferred oil facility is far larger than expectations.
This will provide the much needed support to Pakistan worsening external account position, he added. This will also help Pakistan to negotiate a smaller loan facility from IMF with less stringent conditions.
Khadim Ali Shah Bukhari Securities Managing Director Ali Farid Khwaja said that this is a landmark announcement of support from Saudi Arabia coming at a time when then Saudi government and sovereign wealth funds have become proactive in investing globally.
“I expect the Prime Minister to get similar investments from UAE and China. I think the market will react positively to this in the short term and it’s a major signal of confidence and trust in the new government, he explained
Prime Minister Imran Khan next visit will harvest good deeds, we expect Pakistan to get another five to six billion dollars from China which would ease pressure on domestic currency, said Adil Ghaffar CEO First Equity Modaraba .
He said rupee will strengthen which would help reduce cost of imports and will also help tame inflationary pressure.
– Details by Haris Zamir
