Tag: State Bank of Pakistan

  • PKR gains ground against US dollar, closes at Rs283.26

    PKR gains ground against US dollar, closes at Rs283.26

    The Pakistani rupee (PKR) continued its positive trajectory against the US dollar (USD) for the fourth consecutive session, appreciating by 0.09 per cent in the inter-bank market on Friday.

    According to the State Bank of Pakistan (SBP), the rupee concluded at Rs283.26, reflecting an increase of Re0.25.

    Thursday witnessed a marginal gain in the rupee, settling at Rs283.51 against the US dollar.

    The ongoing optimism is buoyed by the recently released trade figures for November, revealing a noteworthy 13.16 per cent month-over-month (MoM) and a substantial 31.72 per cent year-over-year (YoY) reduction in the trade deficit, amounting to $1.89 billion.

    Export figures exhibited a robust 7.66 per cent YoY surge, reaching $2.57 billion, while imports saw a YoY decline of 14.47 per cent, totaling $4.46 billion.

    On the global front, the US dollar remained near four-month lows on Friday, influenced by the increasing likelihood of US interest rate cuts in the coming year.

    Conversely, the euro and pound found support as their respective central banks reiterated the necessity for sustained higher interest rates.

    Amid an eventful week for central banks, clarity emerged regarding the potential timing of interest rate cuts following Federal Reserve Chair Jerome Powell’s statement during Wednesday’s meeting.

    Powell suggested that the tightening of monetary policy is likely concluding, with discussions about cuts coming “into view.”

    The Fed’s projections imply a 75-basis-point cut next year from the current level, leading to a broad decline of the greenback against its counterparts.

    The dollar index stands at 102.05, not far from the four-month low of 101.76 observed on Thursday, marking a 1.9 per cent decrease and its most significant weekly decline since July.

    Oil prices, a pivotal indicator of currency dynamics, saw an increase on Friday, set to achieve their first weekly rise in two months.

    This positive shift is attributed to a bullish forecast from the International Energy Agency (IEA) regarding oil demand for the upcoming year, coupled with a weaker dollar.

    Brent futures rose by 21 cents to $76.82 a barrel at 0918 GMT, while US West Texas Intermediate (WTI) crude also experienced a 21-cent climb, reaching $71.79.

  • Interbank closing: Pakistani rupee gains 10 paisa against US dollar

    Interbank closing: Pakistani rupee gains 10 paisa against US dollar

    The Pakistani rupee (PKR) demonstrated resilience for the third consecutive session against the US dollar (USD), marking a 0.04 per cent appreciation in the interbank market on Thursday, according to the State Bank of Pakistan (SBP).

    The PKR settled at Rs283.51 after an increase of Rs0.10. This positive trend follows Wednesday’s marginal gain, where the rupee settled at Rs283.61 against the USD.

    In contrast to major currencies, the local currency experienced a loss of Rs2.64 against the Euro, closing at Rs308.49 compared to the previous value of Rs305.85.

    The British Pound strengthened by Rs2.91, concluding at Rs357.96 in comparison to Rs355.05 from the preceding day.

    The Swiss franc also witnessed gain of Rs1.46, closing at 325.35 compared to Rs323.89 in the previous session.

    Against the Japanese yen, PKR lost 5.23 paisa, settling at Rs1.9972 versus Rs1.9449 a day ago.

    In the ongoing financial year, the PKR has appreciated against the dollar by Rs2.48, or 0.87 per cent.

    However, in the current calendar year, it has depreciated by Rs57.08, or 20.13 per cent.

    In a related development, the Asian Development Bank (ADB), in its latest report, Asian Development Outlook (ADO), highlighted that Pakistan’s overall recovery is still constrained by moderate confidence and high inflation eroding purchasing power.

    The ADB noted that Pakistan’s inflation rate averaged 28.5 per cent over July–October but is expected to ease amid fiscal consolidation, monetary tightening, and improved availability of food and key imported inputs.

  • Pakistan repays $5.4 billion of $24.6 billion external debt

    Pakistan repays $5.4 billion of $24.6 billion external debt

    The State Bank of Pakistan (SBP) governor revealed that Pakistan’s external debt obligations for Fiscal Year 2024 are $24.6 billion, as stated during the post-Monetary Policy Committee (MPC) meeting on Tuesday.

    Breaking down the figures, the principal amount is $20.7 billion, with an additional $3.9 billion accounting for interest.

    Notably, a total of $5.4 billion has already been repaid, encompassing a $4 billion principal payment and a $1.4 billion interest payment.

    As a result, the outstanding debt now stands at $19.2 billion, with plans to rollover $12.4 billion (with $9.3 billion already confirmed), according to the governor.

    This leaves a net remaining amount of $6.8 billion for the remaining seven months of the fiscal year. This comprises a $4.3 billion principal and a $2.5 billion interest payment.

    It’s crucial to note that the current foreign exchange reserves are relatively limited, standing at approximately $7 billion.

  • State Bank of Pakistan maintains policy rate at 22% despite inflation concerns 

    State Bank of Pakistan maintains policy rate at 22% despite inflation concerns 

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) convened today to deliberate on the prevailing economic conditions and has resolved to maintain the policy rate at 22 per cent for the fourth consecutive meeting. 

    This decision aligns with market expectations, as a majority of market participants were in agreement regarding the rate remaining unchanged. 

    The Monetary Policy Statement issued by the central bank indicates that the decision takes into consideration the impact of the recent increase in gas prices on November’s inflation, which exceeded the MPC’s earlier projections.  

    The Committee acknowledged the potential implications of this on the inflation outlook while also noting offsetting factors such as the recent decline in international oil prices and the improved availability of agricultural produce. 

    Additionally, the Committee conducted an assessment indicating that the real interest rate remains positive over a 12-month forward-looking horizon and anticipates a downward trajectory for inflation. 

    Key developments since the October meeting were considered by the MPC. Firstly, the successful completion of the staff-level agreement for the first review under the IMF SBA programme, which is expected to unlock financial inflows and enhance the SBP’s foreign exchange serves, 

    Secondly, the quarterly GDP growth for Q1–FY24 met the MPC’s expectations for a moderate economic recovery. 

    Lastly, consumer and business confidence surveys reflected positive sentiment improvements. Lastly, core inflation persists at elevated levels, showing a gradual reduction. 

    Considering these developments, the Committee determined that the existing monetary policy stance is conducive to achieving the inflation target of 5-7 per cent by the end of FY25. 

    The Committee emphasised that this assessment is contingent on the sustained implementation of targeted fiscal consolidation and the timely realisation of planned external inflows. 

  • PSX bounces back with gain of nearly 500 points

    PSX bounces back with gain of nearly 500 points

    The Pakistan Stock Exchange (PSX) welcomed a resurgence of bullish activity as the KSE-100 Index marked a substantial gain of nearly 500 points in Tuesday’s trading session.

    At 1:55 pm, the benchmark index stood at 66,496.21, reflecting a noteworthy increase of 483.89 points, or 0.73 per cent. 

    The positive momentum was evident in key sectors such as cement, fertiliser, oil and gas exploration, OMCs, refineries, and power generation. However, a mixed trend characterised the automobile and commercial bank sectors.

    In contrast to the previous session, where profit-taking led to a 211-point dip in the KSE-100 Index, today’s bullish trend is attributed to favourable economic indicators. 

    Investors are keenly observing the upcoming International Monetary Fund (IMF) executive board meeting on January 11, 2024.

    Simultaneously, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is convening today, with market expectations leaning towards a maintenance of the key interest rate—a rate that reached an unprecedented 22 per cent in June and has remained unchanged for the past three meetings.

    Analysts note that investors have factored in the pinnacle of Pakistan’s interest rates, and optimism surrounds the anticipated successful conclusion of the IMF programme, contributing to the positive sentiment in both the stock markets and the currency.

  • Gold price in Pakistan drops to Rs215,400 per tola 

    Gold price in Pakistan drops to Rs215,400 per tola 

    The price of 24-karat gold per tola witnessed a decrease of Rs200, settling at Rs215,400 on Monday. This marked a decline from its previous closing at Rs215,600 on the last trading day.  

    Simultaneously, the cost of 10 grammes of 24-karat gold saw a reduction of Rs171, reaching Rs184,671 from its earlier value of Rs184,842.  

    In the case of 10 grammes of 22-karat gold, the price dropped to Rs169,282 from Rs169,439, as reported by the All Sindh Sarafa Jewellers Association. 

    The rates for silver, however, remained unchanged, with the per-tola and ten-gramme prices standing at Rs2,600 and Rs2,229.08, respectively.  

    Additionally, in the international market, the cost of gold experienced a $6 decrease, reaching $2,018 from $2,024, according to the Association. 

    Meanwhile, the recent trend of the Pakistani rupee’s appreciation against the US dollar came to a halt as the currency witnessed a marginal 0.01 per cent dip in the interbank market on Monday.  

    The State Bank of Pakistan (SBP) reported that the rupee settled at 283.90, reflecting a decrease of Re0.03. 

  • State Bank of Pakistan to announce monetary policy decision on December 12

    State Bank of Pakistan to announce monetary policy decision on December 12

    The State Bank of Pakistan (SBP) is set to unveil its monetary policy on Tuesday, December 12. A statement released by the central bank on Friday informed that the Monetary Policy Committee (MPC) of SBP will convene in Karachi on December 12 to deliberate on monetary policy. 

    Subsequently, the central bank will issue the official monetary policy statement. In its preceding meeting on October 30, the MPC judiciously opted to uphold the policy rate at 22%, citing global market volatility. 

    The committee underscored the imperative of persisting with a stringent monetary policy stance to mitigate inflation.

    PKR ends another week in green

    The Pakistani currency is experiencing an upward trend against the US dollar for the past several sessions, concluding the week in positive territory on Friday. 

    According to the SBP, the Pakistani rupee gained 0.09 per cent, closing at Rs283.87 against the US dollar.

  • 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.

  • State Bank of Pakistan’s forex reserves decline to $7.02 billion amidst debt repayments 

    State Bank of Pakistan’s forex reserves decline to $7.02 billion amidst debt repayments 

    During the week ending December 1, 2023, the State Bank of Pakistan (SBP) witnessed a decline of $237 million in its foreign exchange reserves, bringing the total to $7,020.2 million. This reduction is attributed to debt repayments.  

    As of the same date, the country’s overall liquid foreign reserves amounted to $12.1 billion. Commercial banks held net foreign reserves totaling $5.08 billion. 

    Notably, the central bank’s reserves received a boost in July of the current year when Pakistan secured the initial tranche of approximately $1.2 billion from the International Monetary Fund (IMF).  

    This was part of a newly approved $3 billion stand-by arrangement (SBA). Additionally, inflows were received from Saudi Arabia and the UAE. 

    Despite these positive developments, the SBP’s reserves have been under pressure due to ongoing debt repayments, increased import payments following eased restrictions, and a lack of new inflows. 

    In a significant development, the IMF announced last month that a staff-level agreement (SLA) had been reached between its team and Pakistani authorities regarding the first review of the SBA.  

    However, the approval of the IMF Executive Board is required for this agreement to take effect. 

    Upon approval, approximately $700 million (SDR 528 million) will become available, bringing the total disbursements under the programme to almost $1.9 billion. 

    Addressing the media after the SLA with the IMF, Caretaker Finance Minister Dr Shamshad Akhtar expressed confidence that external financing would not be a concern.  

    The government anticipates inflows in December 2023, which are expected to contribute to an increase in foreign exchange reserves. 

  • IMF praises Pakistan’s economic progress and stability efforts 

    IMF praises Pakistan’s economic progress and stability efforts 

    The Executive Director at the International Monetary Fund (IMF), Bahador Bijani, acknowledged a positive trend in the economic landscape of Pakistan, highlighting the effective measures taken by the authorities. 

    The statement was made during an event hosted by Masood Khan, Pakistan’s Ambassador to the US, bringing together representatives from key international financial institutions (IFIs) such as the IMF, International Finance Corporation (IFC), World Bank, and Multilateral Investment Guarantee Agency (MIGA) at Pakistan House. 

    Expressing optimism, Bijani highlighted Pakistan’s significance regionally and globally, asserting that the nation merits enhanced prospects.  

    This observation coincides with Pakistan’s current status under a caretaker government while participating in an ongoing IMF programme. 

    Nathan Porter, IMF Mission Chief to Pakistan, addressed the assembly of over 40 IFI representatives, expressing contentment with the recently concluded staff-level agreement.  

    Porter praised the interim government’s actions and policies, underscoring their dedication to steering the country towards stability. He expressed the hope that this foundation would enable the pursuit of reforms for a more robust, prosperous, and inclusive Pakistan. 

    Porter further commended the State Bank of Pakistan (SBP) for its cooperative efforts and policies aimed at ensuring fiscal stability in the country.  

    Athanasios Arvanitis, Deputy Director of the Middle East and Central Asia Department at the IMF expressed optimism that the upcoming elections in February would bring about the necessary reforms for Pakistan’s progress. 

    Syed Ali Abbas, Advisor Mission Chief UK, European Department at the IMF, echoed similar sentiments, anticipating a more enduring approach following the successful completion of the electoral process. 

    Ambassador Masood Khan underscored the transformative impact of Pakistan’s economic digitization, emphasising the emergence of new opportunities for the youth and professionals in steering the nation towards a promising future. 

    Khan asserted that Pakistan, as a nation of talented individuals, has the potential for significant accomplishments.  

    The statement aligns with earlier commendations from Kristalina Georgieva, Managing Director of the IMF, who lauded the Pakistani government for its adept handling of economic stability and timely implementation of reforms earlier this month.