Tag: EXCHANGE RATE

  • Pakistani rupee claims top spot as best-performing currency worldwide 

    Pakistani rupee claims top spot as best-performing currency worldwide 

    Amidst a determined crackdown on smuggling and illegal financial activities, the Pakistani rupee has emerged as the world’s top-performing currency for September. During this remarkable month, the rupee’s value surged from Rs305.54 against the US dollar on August 31st to Rs287.74 on September 28th, a notable increase of Rs17.8 or 6.2 per cent.

    Impressively, this positive trend persisted for 17 consecutive trading sessions, resulting in an overall gain of nearly 7 per cent since hitting its lowest point at 307.1 on September 5th. 

    It’s essential to note that the currency market was closed on Friday, September 29th. In terms of global currency performance, the Mauritian rupee secured the second position with a modest appreciation of 0.7 per cent, while the Hong Kong dollar claimed third place, showing a slight improvement of 0.2 per cent throughout September. These figures are based on data from the brokerage house Arif Habib Limited (AHL), reported on a recent Friday. 

    Financial experts attribute this remarkable rupee surge to a series of government measures aimed at curbing dollar smuggling and currency hoarding. Additionally, during the same month, the State Bank of Pakistan (SBP) introduced structural reforms targeting the Exchange Companies (ECs) sector. These reforms included a directive for commercial banks to establish their own ECs as wholly-owned subsidiaries and an increase in the minimum capital requirement for ECs from Rs200 million to Rs500 million. 

    Notably, the Pakistani rupee recorded substantial gains in the inter-bank market, appreciating by 6-9 per cent against three major currencies – the US dollar, UK Pound, and Euro – over the past few weeks. Even in the open market, the rupee showed a significant upswing of 11-13 per cent, effectively eliminating the premium associated with the open-market rate. This is particularly impressive given that the US Dollar index reached a 10-month high. 

    This strengthening of the rupee aligns with the commitment made by Pakistani authorities in July when they entered into a vital $3 billion Stand-By Arrangement (SBA) with the International Monetary Fund (IMF). This agreement was pivotal in averting a potential sovereign default and required the adoption of a market-based exchange rate, which has now proven to be a pivotal factor in the rupee’s impressive resurgence. 

  • Petroleum prices expected to decline as rupee gains ground against US dollar 

    Petroleum prices expected to decline as rupee gains ground against US dollar 

    As reported by Geo News on Saturday, there’s an expectation that starting on October 1st, petroleum prices will see a decrease due to the stability of the Pakistani rupee (PKR) against the US dollar (USD). This shift is also attributed to a decline in international market prices. 

    The final decision on these petroleum prices will be made by the Ministry of Finance following consultations with interim Prime Minister Anwaar-ul-Haq Kakar. 

    In recent news, the Oil and Gas Regulatory Authority (OGRA) cautioned against prematurely speculating about petroleum product pricing. This comes after federal ministers suggested that rates for petroleum, oil, and lubricants (POL) might decrease in the next fortnightly review. 

    Earlier statements by Caretaker Federal Commerce and Industries Minister Gohar Ejaz and Interim Federal Minister for Information and Broadcasting Murtaza Solangi hinted at a potential drop in POL prices, thanks to the recent strengthening of the Pakistani rupee against the US dollar. 

    Over the past two weeks, the Pakistani rupee has gained about Rs19 against the US dollar. This is significant because Pakistan, as a net importer of POL products, conducts transactions in US dollars. 

    In the previous fortnightly review, the caretaker government had raised petrol prices by more than Rs26 per litre and diesel prices by over Rs17 per litre, reaching record highs at Rs331.38 and Rs329.18 per litre, respectively. 

    OGRA emphasised that the pricing of petroleum products in Pakistan depends on international market trends and the exchange rate between the US dollar and the Pakistani rupee. While international petroleum prices have risen recently, the exchange rate between the US dollar and the Pakistani rupee has improved. 

    However, OGRA pointed out that there’s still one week left before the official announcement of new prices. So, any speculations about price changes during this period are speculative and could disrupt the smooth operation of the oil supply chain. 

  • Pakistani rupee set to become best performer against US dollar following record-low recovery

    Pakistani rupee set to become best performer against US dollar following record-low recovery

    In September, Pakistan’s rupee emerged as the global front-runner in currency performance, driven by the interim government’s vigorous measures to curb illicit US dollar trading.

    According to a comprehensive report by Bloomberg, the Pakistani rupee has experienced a remarkable surge of nearly 6 per cent during this month, a notable accomplishment given the downward trajectory of most other currencies like the Thai baht and South Korean won against the strengthening US dollar, fueled by expectations of prolonged high US interest rates.

    On Thursday, the rupee exhibited resilience by rising 0.1 per cent, reaching Rs287.95 per dollar after hitting a record low of approximately Rs307 earlier in the month.

    Khurram Schehzad, the Chief Executive Officer of Alpha Beta Core Solutions Pvt. Ltd., a financial consultancy located in Karachi, commented on the situation, highlighting the prevalence of leakages through informal channels such as hawala and hundi trade, which are common in South Asia.

    Schehzad noted, when the USD rate reverses, everyone from hoarders to exporters, who have been holding onto their export proceeds, starts offloading their dollars.

    The Bloomberg report underscores the Pakistani government’s intensified efforts to crack down on illegal dollar trading, which have significantly contributed to the rupee’s resurgence.

    In addition to these measures, the central bank has raised capital requirements for smaller exchange companies and mandated large banks to establish their exchange entities, aiming to enhance transparency and oversight in the retail foreign exchange market.

  • Good news: the gain of the rupee continues, now at Rs288.75

    Good news: the gain of the rupee continues, now at Rs288.75

    The Pakistani rupee continued to exhibit strength against the US dollar, marking a 0.36 per cent gain in the inter-bank market on Wednesday. Remarkably, this marks the rupee’s 16th consecutive appreciation against the greenback.

    According to the State Bank of Pakistan (SBP), the rupee settled at Rs288.75, reflecting an increase of Rs1.05 in the inter-bank market. This follows a 0.37 per cent appreciation observed on Tuesday, settling at Rs289.80.

    Over the past days, the rupee has consistently followed an upward trajectory, showcasing a remarkable recovery of over 6 per cent since reaching a historic low of Rs307.1 against the US dollar in the inter-bank market on September 5.

    On the global stage, the US dollar maintained its robust position, trading near a 10-month high against major currencies on Wednesday. This situation is underpinned by the persistent elevation of Treasury yields, driven by expectations of sustained higher US interest rates. Concurrently, the yen faced challenges as it edged closer to a critical intervention threshold.

    Recent statements from Federal Reserve officials have hinted at the possibility of further interest rate hikes, despite the central bank’s decision to hold rates steady the previous week. This has led to an ascent in US Treasury yields to levels not seen in several years, as financial markets recalibrate their expectations regarding the potential peak of US rates and the likelihood of a prolonged period of tight monetary conditions.

    The US dollar index, a gauge of its strength, recently stood at 106.20, having reached a 10-month peak of 106.26 in the preceding session. Meanwhile, the euro remained subdued, hovering close to a six-month low and trading at approximately $1.0569.

  • Commerce minister warns of financial loss over proposed early market closure 

    Commerce minister warns of financial loss over proposed early market closure 

    Caretaker Minister for Commerce, Industries, and Production, Dr Gohar Ejaz, has voiced his opposition to the early market closure proposed as part of the energy conservation plan, expressing concerns over the significant financial losses the government could incur as a result.  

    According to ARY News, Dr Ejaz said that Pakistan currently has a surplus of electricity, making the decision to close markets prematurely economically unfavorable. 

    He revealed that recommendations were sought from all chambers of commerce across the country within a 30-day period. Additionally, Dr Ejaz announced an upcoming anti-gas theft initiative following the anti-power theft operation. He urged traders to be flexible, considering the limited gas resources in the country. 

    Furthermore, he revealed plans to invite 100 international brands to a conference in Pakistan, granting them the status of state guests. Dr Ejaz also mentioned the current exchange rate of the US dollar, which stands at Rs260. 

    To encourage the purchase of electricity from Thar, he directed Sindh and Punjab to do so, promising tax exemptions if they comply. This move aims to make electricity tariffs in these regions more competitive. 

    The caretaker minister stressed the need to boost exports, pointing out that Pakistan’s foreign direct investment is contingent on increased exports. He called for cooperation from business leaders to resolve various issues.  

    Dr Ejaz expressed his commitment to serving the country and previously outlined plans to support industry stakeholders in boosting exports and establishing business parks in major cities to stimulate economic growth. 

  • Pakistani rupee gains value, now at Rs292.78 per US dollar

    Pakistani rupee gains value, now at Rs292.78 per US dollar

    The Pakistani rupee’s ascent against the US dollar persisted for the 12th consecutive session in the inter-bank market on Thursday, registering a 0.38 per cent gain.

    According to the State Bank of Pakistan (SBP), the rupee settled at 292.78, marking a notable increase of Rs1.1 within the inter-bank market. Just the day before, on Wednesday, the rupee had exhibited a similar upward trend, appreciating by 0.35 per cent and settling at 293.88.

    This remarkable turnaround in the rupee’s value follows a recent period of decline, during which it hit a record low of 307.1 in the inter-bank market on September 5.

    The transformation in its fortune can be attributed to a series of structural reforms introduced by the State Bank of Pakistan (SBP) within the Exchange Companies’ (ECs) sector, along with various administrative measures implemented by authorities to combat currency smuggling and hoarding.

    On the global stage, the US dollar reached new heights on Thursday, notably against the yen, marking its strongest position since November.

    This surge in the dollar’s strength followed a hawkish stance taken by the US Federal Reserve at its recent monetary policy meeting, where it opted to maintain interest rates within the 5.25 per cent–5.50 per cent range.

    The Fed’s decision reflected a growing confidence among officials that their assertive monetary policy approach can effectively combat inflation without causing significant economic disruption or substantial job losses.

    Conversely, oil prices experienced a decline on Thursday, following the previous session’s significant drop, as expectations of US interest rate hikes overshadowed the impact of reduced US crude stockpiles.

  • PKR gains for 11th straight session, reaches Rs293.88 per dollar

    PKR gains for 11th straight session, reaches Rs293.88 per dollar

    The Pakistani rupee continued its upward trend against the US dollar, marking the 11th consecutive session of appreciation in the interbank market on Wednesday.

    According to the State Bank of Pakistan (SBP), the rupee closed at 293.88, reflecting a 0.35 per cent increase. This follows a 0.36 per cent appreciation on Tuesday, when it settled at 294.90.

    Recent days have seen a remarkable strengthening of the rupee, with a nearly 4.5 per cent gain since hitting a record low of 307.1 in the inter-bank market on September 5. 

    This turnaround is attributed to structural reforms introduced by the State Bank of Pakistan (SBP) in the Exchange Companies’ (ECs) sector and reported efforts to combat smuggling, both of which have provided support to the currency markets.

    Globally, the US dollar remained steady on Wednesday, with a slight softening against the yen, in anticipation of the Federal Reserve’s highly anticipated rate decision later in the day. 

    The US dollar index, which gauges the greenback against a basket of currencies, held steady at 105.13 as traders awaited the Fed’s announcement. Market expectations are that the Fed will likely maintain interest rates in the range of 5.25 per cent to 5.50 per cent, putting the spotlight on the central bank’s forward guidance.

    Meanwhile, oil prices, a significant indicator of currency stability, declined by nearly $1 on Wednesday, ahead of the US Federal Reserve’s interest rate decision. Investors remain uncertain about when peak interest rates will be reached and the potential impact on energy demand. 

    These price drops occurred despite larger-than-expected reductions in US oil stockpiles and weaker US shale output, both of which point to limited crude supply for the remainder of 2023.

  • 10-day winning streak: Pakistani rupee soars to Rs294.90 against US dollar 

    10-day winning streak: Pakistani rupee soars to Rs294.90 against US dollar 

    In a noteworthy financial trend, the Pakistani rupee continued its upward trajectory against the US dollar, marking its 10th consecutive session of appreciation in the interbank market. On Tuesday, the rupee displayed resilience by appreciating by 0.36 per cent, settling at Rs294.9, following a notable increase of Rs1.05. 

    This positive momentum in the exchange rate follows the previous day’s gain, where the rupee had strengthened by 0.3 per cent to close at Rs295.95. This recent surge in the value of the Pakistani rupee comes in stark contrast to its earlier performance, when it reached an all-time low of Rs307.1 in the interbank market. 

    The shift in fortune can be attributed to government initiatives aimed at reforming the Exchange Companies’ (ECs) sector and cracking down on smuggling activities, both of which have bolstered confidence in the currency markets. 

    This development offers some relief to the prevailing economic outlook, which had been under pressure due to the easing of import restrictions, leading to a widening of the current account deficit in July. 

    Analysts at Topline Securities anticipate that the PKR/USD exchange rate in the inter-bank market will likely remain within the range of Rs320–340 by June 2024, providing a forward-looking perspective on the currency’s performance. 

    Meanwhile, on the global stage, the US dollar experienced a modest decline, albeit remaining close to its six-month peak against major currencies. This movement occurred ahead of the Federal Reserve’s highly anticipated interest rate decision scheduled for Wednesday. 

  • Pakistani rupee surges 0.43% versus US dollar in inter-bank trading

    Pakistani rupee surges 0.43% versus US dollar in inter-bank trading

    The Pakistani rupee displayed resilience against the US dollar, registering a noteworthy 0.43 per cent appreciation in the early hours of trading within the inter-bank market on Friday.

    By 11:15 am, the rupee had reached a level of 296.68, marking a substantial increase of Rs1.28 in the inter-bank market.

    In contrast, on the previous Wednesday, the rupee had demonstrated a 0.29 per cent appreciation, ultimately settling at 297.96.

    Concurrently, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) opted to maintain the key policy rate at 22 per cent, anticipating a future decline in inflation.

    This decision mirrors the MPC’s stance during the preceding meeting, indicating a consistent status quo in the policy rate despite market expectations of a potential rate hike.

    Internationally, the US dollar maintained relative stability in the Asian market on Friday, slightly retreating from its recent gains against other currencies. This shift coincided with the strengthening of the yuan, driven by positive economic data from China.

    The US dollar’s surge was driven by an unexpected increase of 0.6 per cent in August retail sales, surpassing the estimated 0.2 per cent rise. Additionally, market participants reacted to the European Central Bank’s 25-basis-point hike.

    While the US dollar index currently stands at 105.32, marginally lower than Thursday’s six-month peak of 105.43, it still maintains its overall strength.

    Furthermore, oil prices experienced an uptick on Friday, marking their third consecutive weekly gain. This rise was influenced by better-than-expected Chinese economic data and reports indicating record oil consumption, reinforcing the belief in continued high demand from the world’s second-largest crude consumer.

  • 7th straight win: Pakistani rupee gains 86 paisas, closes at Rs297.96 per US dollar

    7th straight win: Pakistani rupee gains 86 paisas, closes at Rs297.96 per US dollar

    The Pakistani Rupee (PKR) has extended its impressive winning streak against the US dollar for the seventh consecutive session, concluding at PKR 297.96 to the dollar. This marks a gain of 86 paisas when compared to the previous rate of Rs298.82 in the interbank foreign exchange market on Wednesday.

    The PKR’s recent surge follows its all-time low of PKR 307.10 on September 5, 2023. Within this short span, the Pakistani rupee has appreciated by PKR 9.14, equivalent to an impressive 3 percent increase in the interbank foreign exchange market.

    Following a concerted effort by authorities to suppress illicit black market activities in the major cities of Pakistan, the Pakistani rupee continued its upward trajectory against the US dollar, marking a substantial three-point gain in the open market on Thursday.

    The Exchange Companies Association of Pakistan (ECAP) reported a noteworthy recovery of the rupee, which surged to 298 in relation to the greenback, reflecting a significant increase.

    This crackdown on black market operators was initiated earlier in the month in response to a precipitous decline in the rupee’s value, hitting a record low of Rs333.7 on September 5. The impetus for this decisive action stemmed from appeals made to Chief of Army Staff (COAS) Gen. Asim Munir by currency dealers, beseeching him to intervene and stabilise the escalating value of the American currency.

    As a direct outcome of these concerted efforts, the Pakistani currency rebounded to a level below 300 per dollar in the open market earlier this week. This positive shift also saw a substantial influx of tens of millions of dollars back into the country’s interbank and open markets, according to reports from dealers.