- Pakistan Rupee (PKR) trends lower paring Wednesday’s gains
- ADB approve $10 billion lending plan
- US Dollar (USD) rises on safe haven in flows
- US Q4 GDP & Jobless claims in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Thursday paring losses from previous session. The pair settled -0.3% at 160.10 after rising to a high of 160.86. At 10:15 UTC, USD/PKR trades +0.3% at 160.60.
The Asian Development Bank (ADB) yesterday approved a 5 year lending programme of $10 billion. The programme is aimed at supporting Pakistan’s efforts to address the economic and social fallout from the covid pandemic.
The loans will start this year and continue through to 2025. Although the actual disbursement of these loans will be dependent on Pakistan’s ability to meet certain conditions in a timely manner.
Pakistan has been dependent on foreign lenders to meet its budget financing and foreign exchange reserves amid resource constraints.
The World Bank is also in the process of approving a 5 year lending strategy to the tune of $12 billion
The US Dollar is edging higher on Thursday across the board. The US Dollar Index trades +0.1% at the time of writing, building on gains from the previous session in risk off trade.
The souring mood in the market is reflected in US futures pointing to a weaker start. Yesterday stocks on Wall Street experienced the steepest one day selloff since October amid rising concerns over the dangerous game being played between retail traders and hedge funds over short position such as GameStop and AMC Entertainment.
The Federal Reserve left monetary policy unchanged as expected. Federal Reserve Chair Jerome Powell adopted a down beat tone highlighting concerns over the health of the US economic recovery. His comments lifted demand for the safe haven US Dollar.
Attention will now turn to the US economic calendar with preliminary reading of the fourth quarter GDP and jobless claims due to be released.
