Tag: Exchange Companies Association of Pakistan

  • US dollar surges by Rs1.90, closes at Rs279.80 against Pakistani rupee

    US dollar surges by Rs1.90, closes at Rs279.80 against Pakistani rupee

    According to the State Bank of Pakistan, the US dollar demonstrated further appreciation against the Pakistani rupee in the interbank market on Monday.

    The American currency gained Rs1.90 against the local currency, closing at a rate of Rs279.80, compared to the previous day’s closing rate of Rs277.90.

    Concurrently, in the open market, the dollar is being traded at Rs283. It is noteworthy that the Pakistani rupee had experienced a gain of Rs10.58 over the course of last week.

    Anticipating future trends, Malik Bostan, the President of the Exchange Companies Association of Pakistan (ECAP), expressed his belief that the value of the dollar will continue to decrease in the upcoming days.

    Furthermore, the price of gold in Pakistan also experienced a slight increase at the beginning of the week, corresponding to the devaluation of the rupee against the dollar.

    As per the data released by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of 24-carat gold rose by Rs800 per tola and Rs686 per 10 grammes, reaching Rs209,000 and Rs179,184 respectively.

  • Pakistani rupee sinks to record low of Rs308 against US dollar in open market

    Pakistani rupee sinks to record low of Rs308 against US dollar in open market

    On Tuesday, the Pakistani currency experienced a significant decline, reaching a new record low of Rs308 against the US dollar in the open market. This marked a 1 per cent decrease, or Rs3, from the previous day’s closing rate, as reported by the Exchange Companies Association of Pakistan.

    Consequently, the disparity between the exchange rates in the open market and the inter-bank market widened considerably, reaching a historic high of Rs21 to a dollar. Just a couple of months ago, this difference was in the range of Rs1-3.

    In inter-bank transactions, the central bank stated that the rupee continued its downward trend for the fifth consecutive working day, dropping by 0.21 per cent, or Rs0.59, to a 12-day low at Rs287.15 against the US dollar.

    There has been speculation in the market that the rupee is facing mounting pressure due to the expanding gap between the demand and supply of the US dollar in the currency market.

    In the meantime, Pakistan’s foreign exchange reserves have been consistently depleting and have now reached a critically low level of $4.3 billion. This is concerning because the country requires a comparatively large amount of foreign currency to cover import expenses and repay foreign debt.

    By the end of June 2023, Pakistan has to repay $3.7 billion in foreign debt. Additionally, it needs another $3.7 billion each month to ensure smooth importation of essential goods.

    Currency dealers in the open market have revealed that commercial banks are purchasing dollars in the informal market (kerb market) to settle international payments made through their clients’ credit cards. Furthermore, individuals are acquiring Saudi riyals and US dollars to cover expenses during the Hajj and Umrah pilgrimages.

    Experts strongly emphasize that the government must persuade the International Monetary Fund (IMF) to resume its $6.7 billion loan programme. Additionally, they urge friendly countries to provide fresh financing, which will help mitigate the risk of defaulting on external debt obligations.

    The resumption of the IMF programme will not only assist Pakistan in averting an imminent default but will also enable the country to attract financing from other global lenders and friendly nations. This new financing will bolster the foreign exchange reserves and aid in the reopening of the partially closed economy.

  • Pakistani rupee bounces back after steep decline against dollar

    Pakistani rupee bounces back after steep decline against dollar

    During the early hours of trading on Friday, the Pakistani rupee (PKR) saw a significant recovery against the US dollar, with an increase of 4.51 per cent. The inter-bank market quoted the PKR at Rs272.78 by 11:50 am, representing an increase of Rs12.31 against the US dollar.

    This follows a steep decline of 6.66 per cent or nearly Rs19 to settle at an all-time low of Rs285.09 against the US dollar on Thursday.

    On Thursday, the State Bank of Pakistan’s Monetary Policy Committee (MPC) raised the key policy rate by 300 basis points (bps) to 20 per cent, aiming to curb inflation.

    The committee also emphasized the need for energy conservation measures to ease pressure on the external account and meet import requirements. The MPC expects this decision to stabilize inflation expectations and bring it to a medium-term target of 5 per cent-7 per cent by end-FY25.

    Globally, the US dollar eased back from a 2-1/2-month high against the yen on Friday, and weakened toward its first weekly loss since January against major peers. This comes as traders tried to gauge the path for Federal Reserve policy.

    According to Geo, the dollar index, which measures the currency against the yen, euro, and four other major peers, fell 0.11 per cent to 104.85, from its peak of 105.36 earlier this week. The index has decreased by 0.36 per cent since last Friday.

    Meanwhile, oil prices, a critical currency parity indicator, dropped on Friday, but remained poised for a weekly gain due to renewed optimism regarding China’s demand recovery, outweighing concerns over growing crude inventories in the US and tighter monetary policy in Europe.

    This is an intraday update.

  • Exchange companies suggest higher US dollar rate to increase remittances

    Exchange companies suggest higher US dollar rate to increase remittances

    The government has been advised by the Exchange Companies Association of Pakistan (ECAP) to “set” the dollar rate to lessen currency market volatility as the country fights a severe economic crisis and declining foreign exchange reserves.

    The general secretary of ECAP Zafar Paracha said in a statement on Monday, “It is advised to fix the rupee/dollar exchange rate for export-import bills and remittances”. He further said these remittance proceeds could be received by banks and money changers at a fixed rate of Rs240 per dollar.

    Pakistani rupee closed at Rs228.34 per US dollar, compared with the previous close of Rs228.15 in the interbank market. In the open market, the local unit was trading at Rs238.75 against the greenback.

    Paracha suggested the government to set the rate of Rs240 per dollar for overseas Pakistanis and for inward remittance.

    He expects that by making the change, the official channel would be strengthened, remittances would increase, Hundi/Hawala would decline, and eventually, the grey market would vanish.

    According to Paracha, the exchange rate between the dollar and the local currency has hit Rs267 to Rs270. The offer could be made at Rs228 against/ the dollar in order to obtain exporters’ revenues. Additionally, the rate for importers would be determined by the weighted average of the exporter and home remittance rates. He said that it would help remittances and exporters.

    It will boost the nation’s foreign exchange reserve, encourage exporters to bring dollars, and strengthen the exchange companies’ remittances division.

    The country received $14.1 billion in remittances during the first six months (July-December) of the current fiscal year, a decline of 11.1 per cent from a year earlier.

    As of January 6, Pakistan’s foreign exchange reserves at the State Bank of Pakistan fell by $1.2 billion to $4.3 billion, just enough to fund three weeks’ worth of imports.

    Due to significant repayments of foreign debt and a lack of external funding, which have severely reduced Pakistan’s foreign reserves and resulted in ongoing dollar shortages, the country is currently facing a balance of payments crisis.

  • Dollar rises to Rs169.6, breaking the previous record

    The United States (US) Dollar continued its surge against the Pakistani rupee as it created a new high, rising to Rs169.6 in the interbank market.

    “Due to the recent sustained rise in the dollar’s value, importers have started booking the currency in advance, which has increased its demand in the interbank market,” Chairman of the Exchange Companies Association of Pakistan Malik Bostan told Dawn.

    Bostan warned that the dollar could become even more expensive if the State Bank of Pakistan (SBP) does not intervene.

    On the other hand, (SBP) pumped $1.2 billion into the inter-bank market in three months to protect the weakening rupee but could not stop the local currency from falling to a historic low.

    From mid-June to the first week of September, the central bank injected $1.2 billion out of its reserves, government sources told The Express Tribune. The maximum single-day injection of $100 million was made in July, followed by $85 million in August, they added.

    Back in November 2019, Pakistan Tehreek-e-Insaf (PTI) Minister for Labour & Culture, Khyber Pakhtunkhwa (KP) Shaukat Yousafzai, was all praises for the rise in the value of the dollar.

    “The increase in dollar benefits Pakistan greatly as we only have to pay in rupees, not in dollars,” said Yousafzai.

    Senior journalist Mansoor Ali Khan shared Yousafzai’s old clip again today as the USD rose to a record high.

    Yousafzai can be heard saying, “The increase in dollar value has increased the cost of BRT by Rs3 billion and at the same time helped us save over Rs3 billion because we only have to pay that amount in rupees, not in dollars.”

    Yousafzai also said that all those saying that the rupee devaluation is going to increase the amout have no idea what they are talking about.