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Foreign investors have flocked into Pakistan bonds at the fastest rate in history. On the foreign exchange market, Pakistani Rupee closed moderately lower against the US dollar settling at 155.45, registering a 0.16% gain. During early Asia trading hours, the USD/PKR exchange rate was seen quoted almost unchanged at 155.30.
The State Bank of Pakistan (SBP) reported that the Pakistani Rupee was traded at Rs 155.20 against Rs 155.53 in the currency market.
According to State Bank of Pakistan, since the beginning of the month foreign investors have bought $642.5 million into domestic bonds. Following the SBP monetary policy to keep its interest rate policy unchanged investors rushed into local currency bonds as they offer an attractive interest rate. SBP’s data revealed that foreign investors have bought $1.1 billion treasury bills and Pakistan Investment Bonds.
Pakistan’s central bank is among very few global central banks to offer double digit interest rates. SBP hiked the last interest rate, this summer by 100 basis points to 13.25% in an effort to fight increased inflationary pressures and trade war headwinds.
After Pakistan government secured another $6 billion bailout package from the International Monetary Fund, investors’ appetite for Pakistan debt has increased in a world governed by negative interest rate policies.
The benchmark equity index Karachi Stock Exchange KSE-100 Index closed up 0.21% at 39153 on Thursday. Year-to-day the Pakistan stock exchange market is up 5.67%. The Pakistan 10-year government bond yield gaped higher and closed at 11.642 versus 11.372 previous closing rates.
On the other hand, the dollar index, which gauges the greenback’s strength against a basket of major currencies, was seen settling down at 98.33 on Thursday close but recovered its losses during the London trading hours.
USD/PKR Technical Pattern
On the technical front, the USD/PKR exchange rate is trying to challenge again the unofficial peg established at the 155.00 support level. In the short-term, the Pakistani Rupee has stabilized above round number 155.00.
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