Pakistan country-specific ETFs have been strengthening in recent weeks on a post-election rally and surged Monday, breaking back above its short-term trend line, on reports that China provided a $2 billion loan to bolster the emerging country’s foreign-exchange reserves.
The Global X MSCI Pakistan ETF (NYSEArca: PAK) rose 6.2% Monday and was trading back above its short-term trend line at the 50-day simple moving average.
Further supporting the gains, the U.S. dollar depreciated 5.4% against the Pakistan rupee currency to PKR121.645 Monday, paring a downward trend this year after Pakistan’s central bank devalued the rupee four times since December, weakening the currency by over 20%.
The Karachi-based Express Tribune newspaper revealed over the weekend that Beijing authorized a $2 billion loan while the Islamic Development Bank enacted a three-year $4.5 billion oil-financing facility, Bloomberg reports.
“Recent news flow regarding loan from China of $2 billion and possible assistance from Saudi Arabia is helping FX market sentiments, we believe,” Mohammed Sohail, chief executive officer of brokerage Topline Securities Ltd., said.