KARACHI: The Pakistani currency on Wednesday hit an all-time low of 146.25 rupees against the US dollar amid looming fears of further devaluation, just days after Pakistan signed a bailout deal with the International Monetary Fund.
The $6 billion bailout package comes with strict reform conditions, including measures to maintain a free-floating exchange rate.
After reaching the record low, the rupee closed at 144 against the dollar at the end of the trading day.
Malik Bostan, president of the Forex Association of Pakistan, said he met with Prime Minister Imran Khan on Wednesday, who assured him that the IMF had not demanded further devaluation of the rupee.
“The IMF has only demanded an exchange rate based on demand and supply,” Bostan told Arab News.
“After the meeting with PM, dollar rates have started cooling down and will further stabilize. We have requested the government to impose a ban on rumors regarding the rupee that are hurting market sentiments. Predictions about the dollar (in) the media should be stopped.”
Bostan said that Khan had consented to setting up a committee comprising officials from the State Bank of Pakistan, exchange companies and the Finance Ministry to resolve the issues faced by exchange companies.
“We have informed him we can increase inflow of greenback from $5-6 billion to $7-8 billion provided agreements are facilitated with around 500 international companies operating in Pakistan,” Bostan said, adding that the PM had agreed to devise a mechanism to discourage the outflow of dollars from Pakistan by encouraging investment in the country.
The International Monetary Fund and Pakistan reached a “staff level agreement” on Sunday for a $6 billion bailout package following months of negotiations on a deal that aims to bolster Pakistan’s flagging economy and perilously low foreign exchange reserves.
Talks with the IMF began soon after Khan’s government was appointed last August but a package has been held up by differences over the pace and scale of reforms that Pakistan would be required to undertake.
The IMF has pressed Pakistan to improve tax revenue collection, bolster foreign currency reserves and narrow a current account deficit expected to top 5 percent of gross domestic product this year. The Fund has also pushed Pakistan to embrace a flexible rupee policy. Pakistani officials fear these steps will further hurt economic growth, cause of spike in the key interest rate and push the Pakistani rupee further down.
“A market-determined exchange rate will help the functioning of the financial sector and contribute to a better resource allocation in the economy,” the IMF said in a statement issued after the agreement.
“The rumors of further devaluation of (the) rupee against dollar have squeezed the supply of the dollar and increased demand,” said Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan. “Those holding dollars are not willing to sell, anticipating gains on devaluation.”
Pakistan rupee hits all-time low days after IMF bailout deal
Pakistan rupee hits all-time low days after IMF bailout deal
- Currency falls to record 146.25 against the US dollar
- PM reportedly said the fund has not demanded further devaluation
Saudi stocks rebalance after Kingdom opens market to global investors
- Foreign access reforms trigger short-term volatility while underlying market fundamentals hold
RIYADH: Saudi Arabia’s stock market experienced a volatile first week following a landmark decision to fully open the market to foreign investors—a move analysts view as essential to funding the Kingdom’s sweeping economic transformation plans.
The Tadawul All Share Index began the week with a sharp decline, falling 1.89 percent on Feb. 1, the same day new regulations eliminating key restrictions on international investment officially came into force. The index rebounded the following session and remained in positive territory for three consecutive days before slipping once more, ultimately ending the week down 1.34 percent.
Ownership data from Tadawul as of Feb. 1 indicated that foreign non-strategic investors reduced their holdings in nearly half of the companies listed on the TASI. An analysis conducted by Al-Eqtisadiah’s Financial Analysis Unit showed that foreign ownership declined in 120 firms, increased in 97 others, and remained unchanged across the remainder. Despite these shifts, the total number of shares held by foreign investors showed no overall change.
Speaking to Arab News, economist Talat Hafiz addressed the initial volatility in the TASI, explaining: “Stock markets in the Kingdom and globally naturally experience fluctuations driven by profit-taking and price corrections.”
He added that the index’s decline and subsequent recovery “appears to be primarily the result of technical and sentiment-related factors rather than a direct reaction to the opening of the market to foreign investors.”
Hafiz emphasized that this was particularly evident given that foreign participation in the Saudi market is not entirely new, having previously existed under alternative regulatory structures.
The market turbulence coincided with sweeping reforms enacted by the Capital Market Authority and announced in January. These measures included the removal of the restrictive Qualified Foreign Investor framework, which had imposed a $500 million minimum asset requirement, as well as the elimination of swap agreements. The reforms aim to attract billions of dollars in fresh investment while improving overall market liquidity.
Hafiz noted that an initial surge of foreign capital was widely expected to generate short-term volatility as portfolios were rebalanced and liquidity dynamics adjusted. However, the rapid recovery of the index suggests that the market’s underlying fundamentals remained strong and that investor confidence was not significantly undermined.
Earlier in January, experts had told Arab News that the reforms could unlock as much as $10 billion in new foreign inflows. Tony Hallside, CEO of STP Partners, described the move as a pivotal evolution, signaling that the Kingdom is committed to building the most accessible, liquid, and globally integrated financial markets in the region.
Hafiz reinforced this optimistic outlook, stating that broader market access is likely to yield positive effects by boosting liquidity, widening participation, and supporting overall market recovery—ultimately contributing to greater long-term stability once near-term adjustments ease.
He said: “TASI’s swift rebound reflects the market’s constructive response to increased openness and deeper investor participation.”
Hafiz said he does not believe the market opening is primarily intended to function as a conventional financing channel. Instead, he argued that its broader objective lies in the internationalization of the Saudi market, a goal underscored by its inclusion in major global indices.
He explained that attracting foreign capital should be understood less as a short-term funding solution and more as a structural reform aimed at strengthening market depth, efficiency, transparency, and global integration.
The Saudi economist added that while increased foreign participation can indirectly support Vision 2030 by enhancing liquidity and reducing the cost of capital, the opening of the market is “not designed as a direct mechanism to revive or fast-track projects that may have faced funding constraints.”
Rather, it creates a more resilient, globally connected financial ecosystem that can sustainably support long-term development ambitions, according to Hafiz.
As the market continues to stabilize, investors and observers are monitoring which sectors are expected to attract the largest share of investment in the coming weeks and months.
Hafiz told Arab News that foreign investment is expected to initially focus on companies operating in strategically significant, high-growth sectors such as healthcare, transportation, and technology, in addition to mining, energy, and telecommunications.
He added that experienced foreign investors are likely to gravitate toward firms demonstrating strong financial disclosure practices, sound corporate governance, adherence to environmental, social and governance standards, and a track record of consistent dividend payouts.
