Tag: EXCHANGE RATE

  • PKR records eighth consecutive gain, closes at Rs282.79 vs dollar

    PKR records eighth consecutive gain, closes at Rs282.79 vs dollar

    In a notable financial trend, the Pakistani rupee (PKR) sustained its positive trajectory against the US dollar (USD) for the eighth consecutive session, witnessing a 0.04 per cent appreciation in the interbank market on Thursday.

    According to the State Bank of Pakistan (SBP), the rupee concluded at Rs282.79 after experiencing a rise of Re0.11.

    The preceding day saw a slight uptick in the PKR’s value, settling at Rs282.9 against the US dollar. 

    A significant development unfolded as the government successfully secured a historic amount of Rs397 billion ($1.4 billion) in Wednesday’s local currency bond auction. 

    This achievement surpassed expectations, marking the highest borrowing in years within a single auction, showcasing sustained market interest even as December draws to a close.

    The substantial participation of investors underscores their confidence in long-term bonds, fueled by the anticipation of an early 2024 rate cut. 

    The government strategically opted for long-term borrowing in response, effectively mitigating rollover risks and minimisingreliance on short-term funding in the future.

    On the global front, the US dollar regained strength on Thursday, prompted by a sudden end to a robust rally for US stocks, compelling investors to seek safety. 

    In the final hour of equities trade on Wall Street, heavy selling induced a ripple of risk aversion through markets, lifting the previously under-pressure greenback from lows.

    As of early Asia trade on Thursday, the dollar index, which is down 1 per cent for the year so far, remained steady at 102.37. 

    In a comparison with major currencies, the Pakistani currency strengthened by 69.15 paisa against the Euro, concluding at Rs309.57 as opposed to the previous rate of Rs310.26. 

    The British Pound saw a reduction in value of 79.58 paisa, settling at Rs357.41 in comparison to the previous day’s Rs358.21.

    However, PKR experienced a slight decline of 0.38 paisa against the Japanese yen, closing at Rs1.974 as compared to the previous day’s rate of Rs1.97. 

    The Saudi Riyal concluded at Rs75.38, registering a decrease of 1.15 paisa from its value of Rs75.39 a day ago. 

    Similarly, the UAE Dirham witnessed a decrease in value of 2.81 paisa, shifting from Rs77.027 the previous day to Rs76.999.

    Meanwhile, oil prices, a crucial indicator of currency parity, experienced a decline on Thursday due to concerns over low demand following an unexpected US crude inventory build, outweighing apprehensions about global trade disruptions linked to tensions in the Middle East. 

    Brent crude futures dropped by 3 cents to $79.67 a barrel, while US West Texas Intermediate crude stood at $74.16 a barrel, reflecting a 6-cent decrease.

  • Pakistani rupee gains 20 paisa against US dollar

    Pakistani rupee gains 20 paisa against US dollar

    The Pakistani rupee (PKR) extended its positive trajectory against the US dollar for the sixth consecutive session, appreciating by 0.07 per cent in the inter-bank market on Tuesday.

    According to the State Bank of Pakistan (SBP), the rupee concluded at Rs283.01, marking an increase of Re0.20.

    In the previous session, the rupee saw a marginal gain, settling at Rs283.21 against the US dollar.

    Meanwhile, in a noteworthy development, Pakistan secured $4.285 billion from various financing sources in the first five months (July–November) of the current fiscal year 2023–24.

    This represents a decrease from the $5.114 billion borrowed during the corresponding period in 2022–23, as disclosed by data from the Economic Affairs Division (EAD).

    On the global front, the US dollar experienced a 0.3 per cent decline against the yen, maintaining its position close to a four-month high of 140.95 reached last week.

    Additionally, the greenback lingered near approximately five-month lows against the Australian and New Zealand dollars.

    This was attributed to the strength of risk-sensitive currencies, driven by the anticipation that the US Federal Reserve might initiate interest rate adjustments as early as the beginning of next year.

    In the realm of commodities, oil prices stabilised on Tuesday as investors assessed the potential repercussions on oil supply arising from attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea.

    These attacks have disrupted maritime trade, compelling companies to reroute vessels. Notably, crude prices surged nearly 2 per cent on Monday due to concerns about trade disruptions through the Suez Canal, a vital shipping route that accounts for approximately 15 per cent of global shipping traffic.

    Brent crude declined by 12 cents to $77.83 per barrel.

    The US West Texas Intermediate crude for January, set to expire on Tuesday, experienced a decrease of 62 cents, reaching $71.85. In contrast, the more active February contract only incurred a marginal loss of 3 cents.

  • Govt may cut petrol price by more than Rs10 per litre

    Govt may cut petrol price by more than Rs10 per litre

    The government is poised to provide significant relief by potentially reducing petrol and diesel prices by Rs13 and Rs15 per litre, respectively, in the upcoming fortnightly pricing update.

    This anticipated reduction is attributed to a noteworthy downturn in international petroleum and diesel prices over the past fortnight.

    The stability of the local currency at a weighted average of approximately PKR 284.33 per USD further contributes to this potential relief. 

    Current estimates as of December 2008 reveal a global decline in petrol and diesel prices by 5.44 per cent and 5.6 per cent, reaching $94.95 and $100.05 per barrel, respectively.

    As the next pricing update is still a week away, the future trajectory of these prices hinges on global market movements and exchange rate fluctuations. 

    Notably, in the preceding fortnight, the government maintained the petrol price at Rs281.34 while reducing the HSD price by Rs7 to Rs289.71 per litre.

  • Overseas workers’ remittances to Pakistan dip to $2.3 billion

    Overseas workers’ remittances to Pakistan dip to $2.3 billion

    In November 2023, overseas workers sent a total of $2.3 billion in remittances to Pakistan, reflecting an 8.6 per cent decrease from the $2.5 billion recorded in October 2023, as per data released by the State Bank of Pakistan (SBP). 

    However, on a yearly basis, there was a 3.6 per cent increase in the monthly inflow compared to the same month in the previous year.

    Remittances are a crucial element in supporting Pakistan’s external accounts and play a vital role in boosting the country’s economic activity while also supplementing the disposable incomes of households dependent on remittances.

    The recent rise in remittances was attributed to an improved exchange rate following a crackdown against currency smugglers and hoarders. 

    This crackdown resulted in a reduction of the rate gap between the open and interbank markets. However, despite this positive trend, remittances have observed a decline on a monthly basis again this November.

    In the first five months of the fiscal year 2024, remittances amounting to $11 billion have been recorded, in contrast to $12.3 billion in the same period of the previous year.

    Breaking down the remittances, it was noted that overseas Pakistanis in Saudi Arabia sent the highest amount in November 2023, totaling $540.3 million. 

    This amount represented a 12.5 per cent monthly decline but was 5.5 per cent higher than the remittances in the same month of the previous year. 

    Remittances from the United Arab Emirates (UAE) also declined on a monthly basis by 13.6 per cent, from $473.9 million in October to $409.4 million in November. 

    However, there was a yearly improvement of 7.6 per cent. Remittances from the United Kingdom increased by 3.5 per cent to $341.7 million compared to October 2023.

    Conversely, remittances from the European Union declined by nearly 10 per cent on a monthly basis, amounting to $268.3 million in November 2023. Overseas Pakistanis in the US sent $261.5 million in November 2023, experiencing a month-on-month decrease of 7.7 per cent.

  • Pakistani rupee predicted to decline to Rs350 against US dollar in 2024

    Pakistani rupee predicted to decline to Rs350 against US dollar in 2024

    According to BMI, a Fitch Solutions Company, the Pakistani rupee is expected to depreciate to as low as Rs350 against the US dollar by the end of 2024. Similarly, Topline Securities Ltd., a brokerage firm, predicts a fall to Rs324. 

    Despite government efforts to combat smuggling and speculation, the local currency has already experienced a 20 per cent devaluation against the dollar, with analysts predicting a continued decline, as reported by Bloomberg. 

    John Ashbourne, a global economist at BMI in London, remarked, “This appears to be a currency that is set to adjust downwards.” 

    “It will be very hard in the long term to convince people to use the official rate if parallel markets offer more value for a dollar,” added Ashbourne. 

    He further stated, “The authorities can push against the tide for a certain amount of time, but they are not able to do that sustainably.” 

    As of Tuesday, the local unit closed at Rs285.52 against the dollar in the interbank market. 

    According to experts, Pakistan’s currency is poised to conclude 2023 as Asia’s worst-performing country in terms of currency performance. 

    In a temporary recovery effort in September, when the rupee was at a record low of Rs300, the caretaker set-up initiated aggressive measures against the illegal purchase and sale of the greenback at a premium exchange rate. 

    However, experts caution that this recovery is expected to be short-lived. 

  • Pakistan to receive $1.5 billion from international lenders following IMF approval

    Pakistan to receive $1.5 billion from international lenders following IMF approval

    Pakistan is poised to secure funds amounting to $1.5 billion from global lenders, contingent on the approval of the loan tranche under the $3 billion Stand-By Arrangement (SBA) by the International Monetary Fund (IMF), as highlighted by Dr Shamshad Akhtar, the caretaker finance minister, in a recent interview with a local news channel.

    It’s noteworthy that the IMF granted preliminary approval on November 15, 2023, for the disbursement of the upcoming loan tranche within the programme.

    Upon receiving approval, Pakistan will gain access to SDR 528 million, equivalent to approximately $700 million. This will contribute to the cumulative disbursements under the program reaching almost $1.9 billion.

    The agreement underscores the authorities’ commitment to advancing planned fiscal consolidation, expediting cost-reducing reforms in the energy sector, completing the transition to a market-determined exchange rate, and pursuing reforms in state-owned enterprises and governance.

    These measures aim to attract investment, support job creation, and simultaneously enhance social assistance.

    Nathan Porter remarked, “Anchored by the stabilization policies under the SBA, a nascent recovery is underway, supported by international partners and indications of improved confidence.”

    He added that the steadfast execution of the FY24 budget, ongoing adjustments of energy prices, and renewed inflows into the foreign exchange (FX) market have alleviated fiscal and external pressures.

  • Pakistani rupee experiences 11th consecutive session of decline against US dollar

    Pakistani rupee experiences 11th consecutive session of decline against US dollar

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    The Pakistani rupee faced its eleventh consecutive session of losses against the US dollar, depreciating by 0.34 per cent in the inter-bank market on Monday.

    According to the State Bank of Pakistan (SBP), the rupee settled at 285.29, marking a decline of Re0.98.

    In the preceding week, the rupee had also suffered losses against the US dollar, closing 1.33 per cent lower at 284.31 in the inter-bank market, equivalent to a decrease of Rs3.74. This marked the third consecutive week of declines for the local currency.

    Prior to this recent trend, the Pakistani rupee had maintained a positive trajectory for 28 consecutive sessions, one of the longest appreciation runs, gaining a cumulative 10.93 per cent since reaching a record low of 307.1 in the inter-bank market on September 5.

    This surge was largely attributed to efforts to combat smuggling and increased controls on exchange companies.

    However, the situation has since shifted in favour of the US dollar, with global currencies remaining stable on Monday but appearing poised to continue their recent uptrend. This comes as the US dollar retreated following a moderation in the Federal Reserve’s hawkish stance.

    Internationally, major global currencies showed stability early on Monday, with the US dollar index flat at 105.11 and the euro at $1.0726.

    The dollar index experienced its most significant decline since mid-July, falling over 1 per cent last week and reaching a six-week low.

    Weakness in US job data, softer global manufacturing figures, and declining longer-term Treasury yields also contributed to the dollar’s weakened position.

  • IMF’s $700 million tranche approval crucial for Pakistani rupee’s recovery

    IMF’s $700 million tranche approval crucial for Pakistani rupee’s recovery

    The Pakistani Rupee (PKR) is expected to rebound against the US dollar this week, with this revival contingent on the approval of the next tranche by the International Monetary Fund (IMF).

    Last week, the PKR weakened by 1.78 rupees (0.6 per cent), closing at Rs280.57 against the US dollar, marking a second consecutive week of decline. On the last trading day, it reached a high of Rs280.5 and a low of Rs280.15 against the greenback.

    In the open market, the rupee depreciated by 50 paisa, closing at Rs279.5 for buying and Rs292.8 for selling, compared to Rs279 and Rs282 a week ago.

    The rupee’s decline is attributed to expectations of the IMF’s approval for the next $700 million tranche of its $3 billion loan. Geopolitical tensions in the Middle East and decreased export receipts have also played a role.

    Despite hopes for recovery post-IMF approval, concerns linger about its long-term stability, with Goldman Sachs predicting a short-lived strong performance.

    The rupee’s fate remains tied to the 280 level until the IMF’s decision. The upcoming weeks and months hold uncertainty amid global economic challenges and geopolitical issues.

    Economists and financial experts are closely watching events, especially the IMF’s decision, which will significantly impact Pakistan’s economic stability as it strives to restore economic health and growth.

  • Pakistani rupee continues to lose against US dollar

    Pakistani rupee continues to lose against US dollar

    The Pakistani rupee experienced a 0.16 per cent depreciation against the US dollar in the inter-bank market on Wednesday, settling at 279.88, marking a decrease of Re0.45, as reported by the State Bank of Pakistan (SBP).

    The previous day, the rupee had depreciated by 0.11 per cent, closing at 279.43 against the US dollar. In a related development, the SBP anticipates an increase in remittances to Pakistan due to a notable rise in labour migration. 

    In fiscal years 2022 and 2023, Pakistan observed a significant surge in labour migration compared to the preceding two years, with around 0.8 million Pakistani workers registered through the Bureau of Emigration and Overseas Employment (BEOE) and Overseas Employment Corporation (OEC) during FY23.

    Internationally, the US dollar gained strength on Wednesday, supported by robust US economic data. Meanwhile, the euro faced challenges due to a dimming growth outlook in the Eurozone. US business output showed improvement in October, signalling a recovery from a five-month contraction, as reported on Tuesday. 

    In contrast, data from the same day indicated an unexpected downturn in business activity in the Eurozone. The euro, against the dollar, was up 0.05 per cent at $1.0595 but had declined by 0.75 per cent the previous day. This shift boosted the dollar index, which steadied at 106.23, moving away from a one-month low of 105.35 recorded in the previous session.

    Furthermore, oil prices remained above $88 on Wednesday, driven by concerns about escalating conflicts in the Middle East, which offset worries about reduced demand due to the gloomy economic prospects in Europe.

  • Pakistani rupee appreciates by Rs5.07 against US dollar in five days 

    Pakistani rupee appreciates by Rs5.07 against US dollar in five days 

    The Pakistani rupee (PKR) showed a notable increase in value against the US dollar (USD), appreciating by 5.07 PKR in five days to reach a closing rate of 277.62 PKR per USD on Friday. This stands in contrast to the previous week’s closing rate of 282.69 PKR per USD.

    In today’s interbank trading session, the local currency exhibited a gain of 96 paisa. It reached an intraday high (bid) of 278.5 PKR and a low (ask) of 287.55 PKR.

    In the open market, exchange companies adjusted their rates, with the rupee strengthening by 1 PKR. These companies quoted the dollar at 274 PKR for buying and 277 PKR for selling, as opposed to the prior rates of 275 PKR for buying and 278 PKR for selling.

    This increase in the value of the rupee can be attributed to several factors. Notably, there has been a concerted effort, backed by the military, to curtail illegal outflows of US dollars from the country.

    Additionally, the government has implemented various measures aimed at bolstering the local currency.

    Addressing concerns related to Afghan transit trade, Pakistan’s Ministry of Commerce recently took a significant step by imposing a ban on 212 items that were previously imported into Afghanistan through Pakistan under the Afghan transit trade agreement.

    This move, enacted through a Statutory Regulatory Order (SRO) issued on October 3, was executed in accordance with the authority granted by the Imports and Exports (Control) Act of 1950.

    Furthermore, the Federal Board of Revenue (FBR) has imposed a 10% processing fee on five key categories of Afghan transit commercial goods imported into Afghanistan via Pakistan.

    In parallel, the State Bank of Pakistan has introduced recent reforms aimed at consolidating and redefining various types of exchange companies into a single category. These changes come with well-defined mandates and higher capital requirements, ultimately contributing to a more transparent financial landscape.