LAHORE - The rupee in interbank market was traded at Rs124.50, appreciating by 3 percent over Friday's close of Rs127.90 last week. Financial experts said that this appreciation of local currency follows after gains witnessed in kerb market over the weekend where the dollar was quoted at 125/126 compared to pre-election level of 131.80, an appreciation of almost 5 percent.

They said that recent news of loan from China of $2 billion and possible assistance from Saudi Arabia is helping Forex market sentiments. 

Financial expert Muhammad Sohail of Topline Market Research said that the Pakistani rupee surged by 4.3 percent to 122.24/123.86 per dollar, following domestic media reports over the weekend on the back of Chinese (up to $2billion) and IDB (up to $4.5 billion credit facility) support packages.

According to experts, the Islamic Development Bank (IDB) has also activated its three-year $4.5 billion oil financing facility for Pakistan that will give stability to rupee-dollar exchange rate in the interbank market that has largely remained under pressure. The International Islamic Trade Finance Corporation (ITFC), a member of the IDB Group, rolled over a loan of $100 million this week. Moreover, Saudi Arabia may soon come to Pakistan's rescue and hopes are high that the new government of Pakistan Tehreek-e-Insaf may get assistance of around $2 billion from the kingdom.

China, which had also refused to bail out the PML-N government, has now agreed to give $2 billion in financial assistance. Of this, over $1 billion has been disbursed this week.

Experts said that as the PTI emerged as the single largest party on the national political landscape, the greenback crashed against local currency, dipping by more than five rupees in open market and now the rate of Dollar has reached Rs122.50 in open market. It is observed that in the previous week before elections, the US dollar had hit extreme high rate and now it has started to fall gradually.

Furthermore, it is expected that the US dollar will continue to drop even more with the creation of a new government. Experts said the stock market achieved around 2400 points, resulting in the stability of local currency.

They said that elections brought stability to the exchange rate on the very first day after polls' results were announced in Pakistan.

During the two months of the caretaker government, the local currency hit the rock bottom against the dollar. It is to be noted that with a persistent decline in Pakistan's foreign currency reserves that were not enough to bear the cost of two months of imports, the rupee weakened to a record low of Rs130.35 to the US dollar in the open market during last one and a half month.