Tag: SBP

  • Exchange rates for today: PKR declines 0.05% against US dollar

    Exchange rates for today: PKR declines 0.05% against US dollar

    The Pakistani rupee (PKR) experienced a slight decline against the US dollar on Thursday, depreciating by 0.05 per cent in the inter-bank market.

    The currency closed at Rs278.67, marking a decrease of Rs0.15 from the previous day’s rate of Rs278.52, according to the State Bank of Pakistan (SBP).

    In comparison with other major currencies, the rupee faced mixed outcomes today:

    Currency Previous rate Today’s rate Change (PKR)
    Euro 309.59 310.65 1.05
    British Pound 362.60 365.10 2.50
    Swiss Franc 325.44 328.04 2.60
    South Korean Won — 0.21 —
    Japanese Yen 1.9063 1.9165 1.02 paisa
    Chinese Yuan 39.03 39.06 3.1 paisa
    Saudi Riyal 74.23 74.27 3.87 paisa
    UAE Dirham 75.87 75.83 4.06 paisa
    PKR vs other currencies

    Euro to PKR: The rupee lost Rs1.05, closing at Rs310.65, compared to the previous rate of Rs309.59.

    British Pound to PKR: The rupee depreciated by Rs2.50, ending the day at Rs365.10, up from Rs362.60.

    Swiss Franc to PKR: The rupee fell by Rs2.60, closing at Rs328.04, compared to Rs325.44 from the previous session.

    Won to PKR: The Pakistani rupee was reportedly trading at Rs0.21 paisa against Won

    Japanese Yen to PKR: The rupee saw a slight decline of 1.02 paisa, closing at Rs1.9165 versus Rs1.9063.

    Chinese Yuan to PKR: The rupee gained 3.1 paisa, closing at Rs39.06, up from Rs39.03.

    Saudi Riyal to PKR: The rupee increased by 3.87 paisa, closing at Rs74.27, compared to Rs74.23.

    UAE Dirham to PKR: The rupee appreciated by 4.06 paisa, closing at Rs75.83, up from Rs75.87.

    Over the current financial year, the rupee has depreciated by 32.82 paisa or 0.12 per cent against the US dollar, while it has appreciated by Rs3.19 or 1.15 per cent since the beginning of the calendar year.

    In the money market, the benchmark 6-month Karachi Interbank Bid and Offer rates fell by 63 basis points to 17.69 per cent and 17.94 per cent, respectively.

    The domestic currency has remained relatively stable in recent months, hovering around the Rs277-279 range against the dollar, as traders monitor positive economic indicators and await the approval of a new $7 billion Extended Fund Facility from the International Monetary Fund (IMF).

    On Wednesday, Pakistan’s Finance Minister, Muhammad Aurangzeb, stated that the IMF Executive Board meeting on Pakistan is scheduled for September, noting that “good progress” is being made with the IMF.

    It is worth noting that this is the third consecutive decline witnessed in the ongoing week.

    Additionally, regarding the Pakistani currency, the central bank plans to introduce newly designed currency notes across all denominations next year to enhance security features, according to SBP Governor Jameel Ahmad.

    Speaking to a parliamentary body in Islamabad on Wednesday, Ahmad stated that the central bank aims to finalise the new designs by December, with the notes to be issued in phases. Notably, one of the denominations will be a polymer note, he added.

  • US remains top export destination for Pakistan in July 2024

    US remains top export destination for Pakistan in July 2024

    In July 2024, the United States emerged as Pakistan’s leading export destination, with shipments totalling $476.02 million, marking an 8.2 per cent increase compared to the $439.89 million recorded in the same month last year, according to data released by the State Bank of Pakistan.

    The United Kingdom followed as the second-largest market for Pakistani goods, with exports reaching $183.3 million. This represents a 6.1 per cent rise from the $172.72 million exported to the UK in July 2023.

    The United Arab Emirates, specifically Dubai, ranked third, with export revenue amounting to $176.18 million—a significant 41.1 per cent surge from the $124.82 million earned during the same period last year.

    China stood as the fourth-largest export destination for Pakistan, with goods worth $160.1 million shipped, reflecting a 5.8 per cent year-on-year (YoY) growth.

    Germany also saw an increase in Pakistani exports, with shipments totalling $135.46 million, a 9.5 per cent YoY rise. Similarly, exports to the Netherlands grew by 15.9 per cent YoY, reaching $124.55 million.

    However, not all markets saw growth. Exports to Spain decreased by 14.4 per cent YoY, with revenue standing at $106.71 million.

    On a month-on-month (MoM) basis, exports to the United States saw a 7.3 per cent increase compared to June 2024, while exports to the UK rose by 20.9 per cent MoM. Exports to Dubai also saw a MoM increase of 6.9 per cent.

  • SBP expected to lower interest rates on Monday as inflation stabilises

    SBP expected to lower interest rates on Monday as inflation stabilises

    The State Bank of Pakistan (SBP) is anticipated to reduce its key interest rate once more during its upcoming policy meeting on Monday.

    This will be the first meeting following the recent staff-level agreement with the International Monetary Fund (IMF) and the announcement of a new state budget, according to analysts.

    Earlier this month, Pakistan and the IMF reached an agreement on a 37-month loan programme. The deal has introduced stringent measures, including increased taxes on agricultural incomes and higher electricity prices, which have sparked concerns among lower and middle-income citizens already struggling with inflation and the potential for increased taxes.

    In June, the SBP lowered its key interest rate by 150 basis points, reducing it from a historic high of 22 per cent. This marked the central bank’s first rate cut in nearly four years, aimed at stimulating economic growth amid a significant decrease in retail inflation. Inflation had dropped to 12.6 per cent in June, down from 38 per cent in May 2023.

    Out of 14 analysts surveyed, only one predicted that the SBP would maintain the current rate of 20.5 per cent. The majority forecast a rate cut, with seven analysts expecting a reduction of 100 basis points, five anticipating a 150 basis points cut, and one predicting a 200 basis points decrease.

    Mustafa Pasha, Chief Investment Officer at Lakson Investments, noted that the anticipated inflationary surge following the budget has not occurred. The central bank had previously cautioned about potential inflationary pressures from the budget, citing insufficient progress on structural reforms to expand the tax base.

    To compensate, the government set a demanding tax revenue target of Rs13 trillion ($47 billion) for the current fiscal year, representing a nearly 40 per cent increase from the previous year, and aims to reduce the fiscal deficit to 5.9 per cent of GDP from 7.4 per cent in the previous year to secure essential IMF funding.

    Pasha added that the clarity on the IMF programme, currency market stability, and steady foreign inflows into domestic debt and equities provide “ample comfort to the SBP to continue easing the policy rate in July and beyond.”

  • SBP to introduce digital currency in Pakistan with technical support from IMF, World Bank

    SBP to introduce digital currency in Pakistan with technical support from IMF, World Bank

    In a media briefing held today in Karachi, Deputy Governor of the State Bank of Pakistan (SBP), Salimullah, announced that the central bank is currently evaluating the introduction of a digital currency.

    This project is being pursued with technical support from the World Bank, in collaboration with the International Monetary Fund (IMF).

    Salimullah highlighted that efforts are underway to link Pakistan with 60 countries, including those in the Middle East, to enhance remittance flows.

    Looking ahead, the governor revealed that the Raast payment system will be integrated with the Arab Monetary Fund’s cross-border payment platform, Buna, by next year.

    Buna facilitates secure, cost-effective, and transparent transactions for financial institutions and central banks across the Arab region and beyond, enabling payments in both Arab and major international currencies.

    The integration with Buna is expected to provide 60 million Pakistanis living abroad with the capability to transfer funds instantly and at minimal costs, significantly boosting economic and financial connectivity.

  • SBP-held forex reserves surge by $18.6 million to $9.42 billion

    SBP-held forex reserves surge by $18.6 million to $9.42 billion

    The latest figures from the State Bank of Pakistan (SBP) reveal a slight increase in the country’s foreign exchange reserves. During the week ending July 12, 2024, SBP’s reserves grew by $18.6 million, marking a 0.20 per cent rise to reach $9.42 billion.

    In parallel, Pakistan’s overall foreign reserves, including both SBP and commercial banks, increased by $58.8 million, or 0.40 per cent, totaling $14.7 billion.

    Commercial banks in Pakistan also saw a rise in their reserves, which grew by $40.2 million, or 0.77 per cent, reaching $5.28 billion.

    Since the start of the fiscal year, SBP’s reserves have grown by $34.2 million, reflecting a 0.36 per cent increase. Notably, in the current calendar year alone, reserves have surged by $1.2 billion, representing a notable 14.63 per cent rise.

    These developments signify positive momentum in Pakistan’s foreign exchange reserves, contributing to a more stable economic outlook for the nation.

  • SBP’s forex reserves decrease by $239 million in a week due to debt repayments

    SBP’s forex reserves decrease by $239 million in a week due to debt repayments

    Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell by $239 million, reaching $8.896 billion as of June 21, according to data released by the central bank on Thursday.

    The total liquid foreign reserves held by Pakistan stood at $14.207 billion, with net foreign reserves held by commercial banks at $5.311 billion. The central bank attributed the decline to external debt repayments.

    “During the week ended on June 21, 2024, SBP reserves decreased by $239 million to $8.896 billion due to external debt repayments,” the SBP stated.

    This comes after a $31 million increase in the central bank’s reserves the previous week. In May, the SBP’s reserves had surged by $1.114 billion, surpassing $9 billion for the first time in nearly two years.

    This increase was primarily due to the disbursement of the last $1.1 billion tranche from the International Monetary Fund (IMF) under its $3 billion Stand-By Arrangement.

    The fluctuating reserves highlight the ongoing financial challenges faced by Pakistan, particularly in managing its external debt obligations and maintaining a stable economic outlook.

  • SBP expected to cut policy rate on Monday

    SBP expected to cut policy rate on Monday

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to convene on Monday, June 10, to deliberate on the nation’s monetary policy. This crucial meeting will be closely watched by market participants and economic analysts.

    Following the MPC meeting, the SBP is expected to release its monetary policy statement via a press release later the same day.

    In the most recent MPC meeting held on April 29, the committee opted to maintain the interest rates at a historic high of 22 per cent, marking the seventh consecutive meeting where rates remained unchanged.

    Speculation is rife among market analysts that the SBP may reduce its policy rate by 100 basis points (bps). If this anticipated reduction materialises, it would be the first rate cut in nearly four years, signalling a potential shift in the SBP’s approach after an extended period of stringent measures aimed at combating rampant inflation.

    The MPC’s decision is set to precede the announcement of the federal budget for 2024-25, adding further significance to Monday’s meeting.

    A potential rate cut could indicate a strategic move to stimulate economic growth and provide relief to businesses and consumers alike in the run-up to the new fiscal year.

  • Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    Pakistan’s forex reserves decline by $63.3 million to $9.09 billion

    The State Bank of Pakistan (SBP) has reported a marginal decline in the nation’s foreign exchange reserves, indicating a decrease of $63.3 million or 0.69 per cent week over week (WoW) to $9.09 billion, according to data released on Thursday.

    The central bank attributed this downturn primarily to debt repayments. In a statement issued by the SBP, it was highlighted that during the week ending May 24, 2024, SBP reserves experienced a $63 million decrease to reach $9.09 billion, primarily due to external debt repayments.

    Similarly, Pakistan’s overall reserves witnessed a decrease of $270 million or 1.85 per cent WoW, amounting to $14.32 billion. Furthermore, commercial banks saw a decline in reserves by $206.7 million or 3.81 per cent WoW, totaling $5.22 billion.

    Despite these fluctuations, the current fiscal year has seen a remarkable increase in SBP-held reserves, amounting to $4.63 billion or 103.6 per cent.

    This surge follows Pakistan’s attainment of the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) of approximately $3 billion by the end of June last year.

    This arrangement not only bolstered the nation’s reserves but also facilitated access to additional multilateral and bilateral funding.

    Furthermore, the ongoing calendar year has witnessed a notable increase of $872.5 million or 10.61 per cent in reserves, reflecting continued efforts to stabilise and strengthen Pakistan’s economic position.

  • SBP holds key policy rate at 22% for seventh consecutive time

    SBP holds key policy rate at 22% for seventh consecutive time

    The State Bank of Pakistan (SBP) announced on Monday that it is maintaining its key policy rate at 22 per cent, marking the seventh consecutive meeting with no changes to the rate.

    The Monetary Policy Committee (MPC), in its meeting, discussed ongoing macroeconomic stabilisation measures.

    The committee noted that these measures have contributed to noticeable improvements in both inflation and the external economic position. This comes against a backdrop of moderate economic recovery.

    The MPC’s statement following the meeting acknowledged that, while inflation has begun to improve, it remains high.

    The committee also mentioned that global commodity prices seem to have stabilised, indicating resilience in global economic growth.

    However, the committee highlighted a number of uncertainties. It pointed out that recent geopolitical events have created additional uncertainty in the global economic outlook.

    Additionally, the upcoming budgetary measures might affect short-term inflation trends.

    Given these factors, the MPC concluded that the current monetary policy stance should be maintained to achieve its inflation target of 5 to 7 per cent by September 2025.

  • SBP likely to hold interest rate at record 22% amid IMF negotiations

    SBP likely to hold interest rate at record 22% amid IMF negotiations

    The State Bank of Pakistan (SBP) is expected to maintain its record 22 per cent interest rate at its upcoming policy meeting on Monday.

    This marks the seventh consecutive meeting with rates held steady, as Pakistan navigates discussions with the International Monetary Fund (IMF) for a new long-term funding arrangement.

    The central bank’s decision comes ahead of an IMF Executive Board meeting to discuss a $1.1 billion disbursement, the final tranche of a $3 billion Stand-By Arrangement.

    A Reuters poll of 14 analysts predicts the SBP will hold its rate, though there are mixed forecasts within the group.

    Four analysts anticipate a 100-basis-point (bps) cut, while two expect a 50-bps cut. Eight believe the SBP will cut rates before securing a new IMF programme.

    The central bank’s next Monetary Policy Committee (MPC) meeting is scheduled for June 10, potentially before Pakistan’s expected new IMF agreement.

    Finance Minister Muhammad Aurangzeb mentioned that discussions with the IMF for a longer-term programme will begin next month, aiming for a staff-level agreement by early July.

    Pakistan’s last rate hike was in June 2023 to combat inflation and meet IMF requirements. Consumer Price Index (CPI) data for March showed a 20.7 per cent increase from the previous year, with a peak of 38 per cent in May.

    However, inflation is slowing, partly due to the “base effect,” with April’s CPI expected to be around 17.5 per cent, according to businessman Arif Habib.

    The SBP’s monetary policy decisions will consider various factors, including inflation trends and geopolitical tensions affecting fuel prices.

    Tahir Abbas, head of research at Arif Habib Limited, suggests rates won’t be cut until a new IMF programme is in place.

    Looking ahead, Mustafa Pasha, Chief Investment Officer at Lakson Investments, predicts a small rate reduction in the current quarter, with significant cuts in the September quarter.

    According to Business Recorder, this is driven by the need to roll over approximately 6.7 trillion rupees in domestic treasury bills in late 2024 and expected stabilization in inflation and foreign exchange inflows.

    He forecasts that the interest rate could settle around 17 per cent by December.