As economic indicators improve, PKR reaches five-month high against UAE dirham

• PKR is projected to strengthen further in the coming weeks owing to inflows of foreign funds inflow as well as positive news on the macroeconomic front.
• Last week, Moody's Investors Service changed Pakistan's outlook to stable from negative.

As country’s economic indicators improve, the Pakistani Rupee have managed to hit a a five-month high against the UAE dirham.

As per Khaleej Times, PKR has gained nearly 5.1 percent versus UAE dirham since June, as it strengthened from 44.5 on June 30 to 42.1 on the weekend. The rupee was trading at 41.9 versus dirham in the open market on Sunday, the report said.

The local currency is projected to strengthen further in the coming weeks owing to inflows of foreign funds inflow as well as positive news on the macroeconomic front.

Last week, Moody's Investors Service affirmed Government of Pakistan's local and foreign currency long-term issuer and senior unsecured debt ratings at B3 and changed the outlook to stable from negative.

Giving the rationale, Moody said, “The change in outlook to stable is driven by Moody's expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility.”

Furthermore, the Asian Development Bank on Friday approved $1.3 billion of policy based loans. The ADB approved $1 billion in immediate budget support to Pakistan, aiding the country's public finances and strengthening a stagnating economy. The bank further approved $300 Million to reform Pakistan's energy sector.

“The quick dispersing Special Policy-Based Loan is part of a comprehensive multidonor economic reform program led by the International Monetary Fund (IMF) to stabilize Pakistan's economy after a major deterioration in its fiscal and financial position in mid-2018 caused growth to slump and threatened progress in alleviating poverty," ADB said in a statement.

Meanwhile, “the financing will support the first of three subprograms totalling $1 billion under the Energy Sector Reforms and Financial Sustainability Program," stated ADB.