Tag: Dollar

  • Gold prices rise on weaker Pakistani rupee and economic outlook

    Gold prices rise on weaker Pakistani rupee and economic outlook

    On Tuesday, gold prices rose further to reach a one-week peak achieved last week, supported by a weaker Pakistani rupee. Investors were keeping an eye on upcoming economic developments that could impact the market’s direction. The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the price of gold (24 carats) rose by Rs500 per tola and Rs429 per 10 grammes to settle at Rs197,000 and Rs168,896, respectively.

    The decline of the Pakistani rupee against the US dollar in the interbank market by 0.24 per cent to Rs262.51 boosted the appeal of the precious metal. However, the outlook for gold remained uncertain as the prospects of the rupee’s recovery against the dollar increased, driven by optimism surrounding the revival of the International Monetary Fund (IMF) programme.

    The yellow metal gained Rs3,800 per tola over the last three sessions. Silver prices in the domestic market also increased by Rs20 per tola and Rs17.14 per 10 grams to settle at Rs2,150 per tola and Rs1,843.27 per 10 grammes, respectively.

    Meanwhile, in the international market, gold prices dropped by $12 per ounce to settle at $1,832 due to the rise of the dollar, while investors awaited US economic data to determine the Federal Reserve’s interest rate strategy. The dollar index remained high, making dollar-priced gold more expensive for buyers with other currencies.

    Han Tan, chief market analyst at Exinity, said that gold’s primary driver remains the changing expectations surrounding the Fed’s policy moves, and the upcoming release of the FOMC minutes could provide more clues. If the US economy continues to defy the Fed’s rate hikes, it could lead to a higher peak for US rates, which would disappoint bullion bulls.

    The market focus this week is on the release of the Federal Open Market Committee’s January meeting minutes on Wednesday, followed by US gross domestic product data on Thursday and Friday’s core PCE price index. Although gold prices reached their highest level since April 2022 earlier this month at $1,959.60, they have dropped by approximately $130 after US data indicated a robust economy.

  • Pakistani rupee breaks winning streak, closes at Rs262.51 against dollar

    Pakistani rupee breaks winning streak, closes at Rs262.51 against dollar

    During Tuesday’s interbank trading, the Pakistani rupee (PKR) declined and experienced losses against the dollar, reaching a low of Rs265 versus the dollar.
    The rupee lost 63 paisas versus the dollar by the time markets closed, depreciating by 0.24 per cent.

    The local currency commenced trading at Rs261.50 versus the US dollar with full red value. By lunchtime, the dollar had risen to about Rs264 versus the rupee. Before the interbank closure, the local currency was mostly bearish versus the top foreign currency after 1 PM.

    The National Assembly passed the Finance (Supplementary) Bill, 2023, on Monday, proposing extra taxes and tariffs of Rs170 billion, ending the rupee’s five-day winning streak against the dollar and clearing the way for the staff-level deal with the International Monetary Fund (IMF).

    After its record-breaking single-day plunge of Rs25 in the latter week of January, when the rupee was finally “freed” versus the US dollar in the inter-bank market, the rupee has lost more than Rs27. The PKR has decreased by 62.99 paisas today based on observable market trends and fiscal developments.

    Money exchangers claim that a further delay in the staff-level agreement with the IMF might increase pressure on the PKR as investors and exporters alike track exchange rate movements to calculate profit yields in the face of constrained revenue estimates and related import restrictions.

    The rupee may appreciate until the conclusion of the current fiscal year, 2022–2023, in the event that the rescue is successful.

    After obtaining a $2.5 billion loan, the IMF’s current loan programme will end on June 30, 2023. Pakistan will have to reapply for the new loan programme if necessary in the next fiscal year.

  • SBP-held foreign exchange reserves drop to a highly critical level of $2.92 billion

    SBP-held foreign exchange reserves drop to a highly critical level of $2.92 billion

    The State Bank of Pakistan (SBP) has reported a decrease in its foreign exchange reserves, as reflected in data released on Thursday. The reserves fell to a total of $2.92 billion, marking a reduction of $170 million.

    According to the recent data, the current level of reserves held by the bank has reached its lowest point since February 2014.

    The country’s total liquid foreign reserves were reported to be at $8.54 billion, according to the latest data. Meanwhile, commercial banks in the country held net foreign reserves of $5.62 billion.

    “During the week ended on February 3, 2023, SBP’s reserves decreased by $170 million to $2,916.7 million due to external debt repayments,” the SBP said in a statement.

    The State Bank of Pakistan (SBP) experienced a substantial decrease in its foreign exchange reserves last week, declining to $3.09 billion, a drop of $592 million. This represents the lowest level of reserves for the central bank since February 2014. The current level of reserves falls below one month’s worth of import coverage.

    The depletion of the central bank’s reserves, which stood at nearly $18 billion at the beginning of 2022, highlights the pressing need for Pakistan to move forward with the next review of its International Monetary Fund (IMF) program.

    These declining reserves serve as a reminder of the economic challenges facing the country and the importance of addressing them in a timely and effective manner.

  • Pakistani rupee gains Rs1.28 against US dollar, closes at Rs275.30

    Pakistani rupee gains Rs1.28 against US dollar, closes at Rs275.30

    On Monday, the Pakistani rupee exhibited a slight improvement in its exchange rate against the US dollar, closing with a gain of 0.46 per cent in the inter-bank market. The local currency settled at Rs275.30 per US dollar, an improvement of Rs1.28, according to the State Bank of Pakistan (SBP).

    During the current fiscal year, the rupee has depreciated by 25.47 per cent against the US dollar. This appreciation follows a recent decline, with the rupee hitting an all-time low against the US dollar on Friday, closing at Rs276.58, a decrease of Rs5.22 or 1.89 per cent.

    Last week, the Pakistani rupee experienced a cumulative decline of 5.05 per cent. This was due to a number of factors, including low foreign exchange reserves, which decreased by an additional $592 million to reach a mere $3.09 billion.

    Additionally, comments made by Prime Minister Shehbaz Sharif regarding the challenging loan negotiation process with the International Monetary Fund (IMF) further added to investor concerns.

    Discussions with the IMF are ongoing, and reports indicate that the organization is requiring reforms and preconditions in several critical areas, including taxation, the power sector, and energy pricing. Analysts predict that the rupee will continue to face pressure until the IMF program is fully clarified.

  • Intraday update: Pakistani rupee drops to historic low of Rs278.67 against US dollar

    Intraday update: Pakistani rupee drops to historic low of Rs278.67 against US dollar

    After Finance Minister Ishaq Dar authorised a proposal for charity groups to help raise almost $2 billion from overseas Pakistanis, the Pakistani rupee (PKR) fell by over 2.5 per cent against the dollar during intraday trade on Friday, falling as low as Rs278 against the dollar.

    The rupee was trading at Rs278.67 versus the dollar in intraday trade on the interbank market around 12:50 pm, according to the Exchange Companies Association of Pakistan (ECAP).

    The local currency fell by Rs7.32 from its previous day’s closing rate of Rs271.35 to the US dollar.

    The PKR has lost Rs7 or more versus the US Dollar during intraday trade for the third time in a week.

    Bloomberg reports that Pakistani rupee and dollar bonds fell after Prime Minister Shehbaz Sharif said that the International Monetary Fund (IMF) is making life difficult for the country in the ongoing loan negotiations.

    According to information gathered by the US publication, USD/PKR increases 1.8 per cent to a record 275.0250. Bonds that are due in April 2024 were priced at 56.94 cents on the dollar, down 0.3 cents.

    Experts claim that the market is responding to news stories about the demands put forward by the IMF. In the coming days, rupee losses will intensify if Pakistan is unable to reach a staff-level agreement with the Fund.

  • ‘Toughest’ technical level talks between Pakistan and IMF on ninth review begin in Islamabad

    ‘Toughest’ technical level talks between Pakistan and IMF on ninth review begin in Islamabad

    Negotiations to reach a staff-level agreement on the ninth review of the $7 billion Extended Fund Facility (EFF) have started between Pakistan and the International Monetary Fund (IMF) on Tuesday.

    As the cash-strapped government launches new efforts to conclude the lingering ninth review, Finance Minister Ishaq Dar is leading the Pakistani side and Nathen Porter is in charge of the IMF review team. The review team from the IMF arrived in Islamabad on Monday.

    Pakistan is likely to discuss its strategy for implementing further revenue measures with the visiting review delegation.

    The Fund has refused to compromise on the terms it outlined for the restoration of the lending facility, causing analysts to label the technical level negotiations as “toughest.”

    According to The News, Pakistan is experiencing a severe economic crisis, with the currency falling, inflation skyrocketing, and a shortage of electricity. Because he was worried about backlash before the upcoming elections in October, Prime Minister Shehbaz Sharif resisted the IMF’s demands for tax increases and subsidy reductions for months.

    However, Islamabad has begun to yield to pressure in recent days as the threat of national insolvency grows and no friendly nations are ready to give less severe bailouts.

    To manage a growing illicit market in US dollars, the government relaxed limitations on the rupee, which led to the currency falling to historic lows. Additionally, artificially low petrol costs have increased.

    “We’re at the end of the road. The government has to make the political case to the public for meeting these (IMF) demands,” former World Bank economist Abid Hasan told AFP.

    “If they don’t, the country will certainly default and we’ll end up like Sri Lanka, which will be even worse.”

    Last year, Sri Lanka entered into debt default and experienced months of food and fuel shortages that led to unrest and finally forced the nation’s government to depart the country.

  • The petrol hike might make you cry but at least these hilarious memes won’t

    The petrol hike might make you cry but at least these hilarious memes won’t

    How do Pakistanis start a Sunday morning?
    Apparently, by learning about how their budgets will be stretched out even further.
    Pakistanis woke up on Sunday morning to learn that a new petrol hike had announced by the Finance Minister, Ishaq Dar. In a press conference, he revealed that a Rs 35 increase would be applied from 11 am on that very day.
    Well how do Pakistanis deal with the crashing economy, no electricity and crushing debt? With some killer memes.

    Well how do Pakistanis deal with the crashing economy, no electricity and crushing debt? With some killer memes.

    It sparked some ideas about some creative ways to travel.

    The superior gender FTW.

    *wink wink*

    Get her a diamond ring? Taking her on a date to an expensive restaurant? Ditch all of that because a better idea dropped.

    BRB learning how to speak in Korean

    PLEASE

    In other words:

  • ‘Misleading and incorrect’: OGRA rejects speculations about massive petrol price hike

    ‘Misleading and incorrect’: OGRA rejects speculations about massive petrol price hike

    The Oil and Gas Regulatory Authority (OGRA) on Saturday rubbished rumours about a whooping increase of Rs80 per litre in petrol price.

    “It has been observed that speculative prices of gasoline and diesel are being reported in the print and electronic media since last evening, which is misleading and incorrect,” an OGRA spokesman said in a press statement.

    He advised the elements to avoid disseminating speculative prices of petroleum products in the “public interest” by spreading misleading and incorrect information.

    Earlier, OGRA also denied reports of a shortage of diesel and gasoline in the country, saying that sufficient stocks were available. However, in line with the government’s aim to convince the International Monetary Fund (IMF), the Ministry of Finance is expected to increase the price of petroleum in the upcoming fortnightly review.

    The massive depreciation of the local currency against the US dollar in the last two days would not reflect greatly in the review due on January 31 (Tuesday) as the average exchange rate would clock in at Rs240, information gathered from the country’s oil sector showed.

    However, the fortnightly review due on February 15 may reflect a significant increase in domestic petroleum prices on account of rupee depreciation.

    Free on board (FOB) pricing will result in a significant increase in the price of fuel and gasoline in the subsequent weekly review the following week, according to The News.

    According to sources with knowledge of the situation, using FOB would likely result in an increase of Rs25 in the price of fuel. “The exchange rate would create some hike, but not so much”, they said, attributing the hike to FOB as diesel price in the international market went up to $117 per barrel compared to $114 per barrel.

  • Intraday update: Pakistani rupee drops to Rs268.30, losing more than Rs12 versus US dollar

    Intraday update: Pakistani rupee drops to Rs268.30, losing more than Rs12 versus US dollar

    Pakistani rupee (PKR) continued its downward trend on Friday, with the rupee declining over Rs12 versus the US dollar in the interbank market. The local currency was trading at Rs268.30, compared to yesterday’s close of Rs255.43 in the interbank market.

    The dollar has gained Rs30.41 in the interbank market since Thursday as exchange companies removed the dollar cap, a key demand of the IMF as part of a bailout programme agreed upon in 2018.

    PKR fell to Rs265 against the US dollar in the open market, a decline of Rs3 compared to the day before.

    The removal of the cap on the dollar rate took the currency market by surprise and resulted in extreme volatility. Experts termed it a “much-awaited adjustment” and predicted that it would help in increasing export proceeds and inward remittances through legal banking channels.

    The difference in rates between the interbank and open markets owing to the price cap removal, which had widened to Rs15 in recent months, was almost wiped out.

    The country’s foreign exchange reserves have depleted to a critical level, falling to $3.678 billion in the week ending January 20. This is not enough to finance even three weeks of imports.

    This is a developing story and will be updated after interbank closing.

  • Gold price hits all-time high of Rs195,500 per tola after removal of an unofficial dollar cap

    Gold price hits all-time high of Rs195,500 per tola after removal of an unofficial dollar cap

    Gold prices in Pakistan continued their record-breaking spree as the price of 24-carat gold reached an all-time high of Rs195,500 after gaining Rs4,900.

    In addition, the price of 10 grammes also witnessed an increase of Rs4,201 to settle at Rs167,610, according to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).

    Moreover, the bullion rate in the international market reached $1,936 after a surge of $11.

    The Pakistani rupee (PKR) on Thursday dropped drastically to approach an all-time low, days after exchange companies abolished the cap on the rupee-dollar exchange rate.

    The sudden hike in yellow metal prices comes as the weakening rupee pushed investors to the safety of bullion to hedge against intensifying economic turmoil in the country.

    On Thursday, the local currency crashed to approach another historic low, as it dropped to Rs255.43 versus the US dollar in the interbank market, sliding Rs24.54 or 9.61 per cent from Wednesday’s close, according to the State Bank of Pakistan.