The money market has clearly priced in full resumption of the Extended Facility (EFF) and after recovering more than three percent in two days and then dropping a little, it still stands at 208.4 at the time of writing, a near two percent premium over its value just two days ago. PM Shahbaz Sharif’s surprise announcement of a 10pc super tax on large industry was responsible for part of the reversal, but exporters were convinced enough to sell dollars en masse in preparation of the Facility. China’s decision to roll over a loan worth $2.3 billion also played a big part, no doubt, so reserves can now breathe a sigh of relief for at least the near term. Welcome though this news is, let’s not forget that this is still largely sentiment-driven, and the country’s economic managers would have to pull some rabbits out of their hats to maintain this trajectory for the medium to long term. There’s also the inconvenient fact that the dollar is on an uptrend of its own, amplified by the Federal Reserve Bank’s decision to raise interest rates sharply just last week. Therefore, the greenback will be buoyed to the upside for reasons that we have nothing to do with and cannot influence in any way whatsoever. But the finance ministry’s most pressing concern would be to get the Fund to sign on the dotted line, restore the program technically, receive the remainder of the money, and approach other international financial institutions (IFIs) for more aid because we must cough up approximately $40 billion in debt repayment over the next year. It also helps enormously that Brent crude is softening in the international market, which should prop up the rupee a while longer than would have been the case just a few days ago. All this means that the wind is finally favouring Pakistan and once it has enough of it in its sails, it can at least begin drifting away from the prospect of sovereign default. The rupee is signalling, then, that the immediate crisis might have been avoided. But that does not mean in any way that we’re out of the woods yet. *