Defying expectations, rupee recovers 1.34pc.

Contrary to expectations of a further drop in the rupee's value, the Pakistani currency recovered 1.34% to the US dollar and stood at Rs131.93 in the inter-bank market on Friday.

The recovery came in the backdrop of International Monetary Fund's (IMF) announcement that it was sending a mission to Pakistan in the wake of Islamabad's request for financial assistance.

Apart from this, friendly countries like Saudi Arabia, China and Azerbaijan have offered Pakistan investment in China-Pakistan Economic Corridor (CPEC) projects, soft loans and credit line for oil imports.

The rupee touched an intra-day high of Rs131.50 during the day in the inter-bank market. More importantly, it never fell below the Thursday's closing of Rs133.80.

The slight bounce back came following the rupee's massive depreciation by 7.68% to Rs133.80 to the US dollar earlier this week, which was the fifth round of free fall since December 2017. Cumulatively, the rupee has lost around 25% of its value since December to date.

In addition to that, rumours were doing rounds in the market that China may provide another $1-2 billion for Pakistan in a bid to stabilise the dwindling foreign currency reserves, he said.

Earlier, China has formally welcomed Saudi Arabia as a new partner in the $60-billion CPEC programme. This means Riyadh will make a significant capital injection into CPEC projects.

Azerbaijan has also offered Pakistan a $100-million credit line for the import of petroleum products.

In the open market, the rupee recovered...