Tag: US dollar

  • 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.

  • Rupee depreciation may lead to an increase in petroleum prices, says Musadik Malik

    Rupee depreciation may lead to an increase in petroleum prices, says Musadik Malik

    Dr Musadik Malik, the State Minister for Petroleum, issued a warning on the potential increase of petroleum product prices due to the significant decline in the value of the Pakistani rupee against the US dollar.

    During an appearance on the Geo News program “Capital Talk” on Thursday, Dr Malik stated that the depreciation of the rupee could lead to an upsurge in the prices of petroleum products in the upcoming days. He also shared that the negotiations between Pakistan and Russia on oil imports were progressing well.

    According to Dr Malik, the sudden increase in the US dollar’s price was due to political instability, making it difficult to govern the country in such an uncertain environment. Notably, during the last fortnight’s review, Finance Minister Ishaq Dar announced a reduction in petroleum prices.

    As a result, the government cut the price of petrol by Rs5 per litre, setting it at Rs267 per litre, while the price of diesel remained steady at Rs280 per litre.

    In addition, the price of light diesel oil decreased by Rs12 per litre, bringing it down to Rs184.68 per litre. Furthermore, the cost of kerosene oil was reduced by Rs15 per litre, bringing its price to Rs187.73.

  • Pilgrims paying in US dollars to receive special discount for upcoming Hajj

    According to recent reports, the government is planning to provide incentives to citizens who choose to pay their dues for the upcoming Hajj in US dollars.

    Additionally, the Ministry of Religious Affairs has allocated a 25 per cent special quota for pilgrims who deposit the amount in dollars, as per APP.

    This move is a response to the government’s efforts to strengthen the fast-dwindling foreign reserves. According to a report by SAMAA on Friday, pilgrims who pay their application fees and other charges in US dollars will receive a special discount.

    SAMAA also cited the draft of the Hajj Policy 2023, which states that pilgrims will be given the option to choose the currency in which they wish to pay. Those who choose to pay in dollars will be exempted from the balloting process under the new Hajj policy, as reported by APP.

  • Pakistani rupee strengthens by Rs2.82 against dollar, closes at Rs270.51

    Pakistani rupee strengthens by Rs2.82 against dollar, closes at Rs270.51

    The Pakistani rupee (PKR) experienced an upward trend against the US dollar in the inter-bank market on Thursday, appreciating by 1.04 per cent due to expectations surrounding the revival of the International Monetary Fund (IMF) program.

    According to the State Bank of Pakistan (SBP), the currency closed at Rs270.51 against the US dollar, reflecting an increase of Rs2.82. Despite this improvement, the currency has depreciated by 23.7 per cent during the current fiscal year against the US dollar.

    On Wednesday, the PKR also saw significant gains against the US dollar, closing at Rs273.33, reflecting an appreciation of Rs2.95 or 1.08 per cent.

    In a key development, Finance Minister Ishaq Dar said on Thursday negotiations between Pakistan and the IMF are “on track” and “we will announce good news soon”.

    Speaking to the media, Dar said talks between the two sides had entered the final round, progress has been “satisfactory” and he hopes discussions will conclude today.

    The dollar index, which measures the US currency against six rivals, was 0.029 per cent higher on Thursday at 103.460, having dropped nearly 0.3 per cent in the previous session.

    Gold prices, rose for a fourth straight session as the dollar faltered, although bullion’s outlook remained cloudy amid the comments made by Fed officials.

    Meanwhile, oil prices, a key indicator of currency parity, were broadly steady on Thursday as the prospect of higher fuel demand in China as it reopens post-COVID curbs were offset by fears that US crude stocks hitting their highest for months may signal weakening demand in the world’s number one economy.

  • Pakistani rupee gains Rs1.28 against US dollar, closes at Rs275.30

    Pakistani rupee gains Rs1.28 against US dollar, closes at Rs275.30

    On Monday, the Pakistani rupee exhibited a slight improvement in its exchange rate against the US dollar, closing with a gain of 0.46 per cent in the inter-bank market. The local currency settled at Rs275.30 per US dollar, an improvement of Rs1.28, according to the State Bank of Pakistan (SBP).

    During the current fiscal year, the rupee has depreciated by 25.47 per cent against the US dollar. This appreciation follows a recent decline, with the rupee hitting an all-time low against the US dollar on Friday, closing at Rs276.58, a decrease of Rs5.22 or 1.89 per cent.

    Last week, the Pakistani rupee experienced a cumulative decline of 5.05 per cent. This was due to a number of factors, including low foreign exchange reserves, which decreased by an additional $592 million to reach a mere $3.09 billion.

    Additionally, comments made by Prime Minister Shehbaz Sharif regarding the challenging loan negotiation process with the International Monetary Fund (IMF) further added to investor concerns.

    Discussions with the IMF are ongoing, and reports indicate that the organization is requiring reforms and preconditions in several critical areas, including taxation, the power sector, and energy pricing. Analysts predict that the rupee will continue to face pressure until the IMF program is fully clarified.

  • Intraday update: Pakistani rupee drops to historic low of Rs278.67 against US dollar

    Intraday update: Pakistani rupee drops to historic low of Rs278.67 against US dollar

    After Finance Minister Ishaq Dar authorised a proposal for charity groups to help raise almost $2 billion from overseas Pakistanis, the Pakistani rupee (PKR) fell by over 2.5 per cent against the dollar during intraday trade on Friday, falling as low as Rs278 against the dollar.

    The rupee was trading at Rs278.67 versus the dollar in intraday trade on the interbank market around 12:50 pm, according to the Exchange Companies Association of Pakistan (ECAP).

    The local currency fell by Rs7.32 from its previous day’s closing rate of Rs271.35 to the US dollar.

    The PKR has lost Rs7 or more versus the US Dollar during intraday trade for the third time in a week.

    Bloomberg reports that Pakistani rupee and dollar bonds fell after Prime Minister Shehbaz Sharif said that the International Monetary Fund (IMF) is making life difficult for the country in the ongoing loan negotiations.

    According to information gathered by the US publication, USD/PKR increases 1.8 per cent to a record 275.0250. Bonds that are due in April 2024 were priced at 56.94 cents on the dollar, down 0.3 cents.

    Experts claim that the market is responding to news stories about the demands put forward by the IMF. In the coming days, rupee losses will intensify if Pakistan is unable to reach a staff-level agreement with the Fund.

  • Highest single-day fall: Gold price drops by Rs9,000 to Rs201,500 per tola

    Highest single-day fall: Gold price drops by Rs9,000 to Rs201,500 per tola

    As the rupee marginally strengthened against the US dollar and investors closely followed the US Federal Reserve’s interest rate rise decision and policy outlook, the price of gold in Pakistan saw its worst one-day decline.

    The price of gold (24 carats) fell by Rs9,000 per tola and Rs7,716 per 10 grammes to settle at Rs201,500 and Rs172,754, respectively, according to data issued by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).

    The jewellers’ association also claimed that local gold in Pakistan was “overcost” by Rs2,500 per tola when compared to the bullion market in Dubai.

    The price of gold has fallen as demand has decreased as investors appear to have abandoned the safe-haven commodity in favour of the dollar, which is now freely available on the open market following the lifting of the dollar cap.

    As a result of the events surrounding the negotiations with the International Monetary Fund (IMF), the Pakistani rupee began to show signs of recovery today, rising by about Rs2 to settle at Rs267.89.

    However, investors were only buying gold bars, not jewellery, which had lowered goldsmiths’ profit margins and put the labour force at risk of losing jobs as jewellery manufacturers turned to other careers in the lack of work.

  • ‘Toughest’ technical level talks between Pakistan and IMF on ninth review begin in Islamabad

    ‘Toughest’ technical level talks between Pakistan and IMF on ninth review begin in Islamabad

    Negotiations to reach a staff-level agreement on the ninth review of the $7 billion Extended Fund Facility (EFF) have started between Pakistan and the International Monetary Fund (IMF) on Tuesday.

    As the cash-strapped government launches new efforts to conclude the lingering ninth review, Finance Minister Ishaq Dar is leading the Pakistani side and Nathen Porter is in charge of the IMF review team. The review team from the IMF arrived in Islamabad on Monday.

    Pakistan is likely to discuss its strategy for implementing further revenue measures with the visiting review delegation.

    The Fund has refused to compromise on the terms it outlined for the restoration of the lending facility, causing analysts to label the technical level negotiations as “toughest.”

    According to The News, Pakistan is experiencing a severe economic crisis, with the currency falling, inflation skyrocketing, and a shortage of electricity. Because he was worried about backlash before the upcoming elections in October, Prime Minister Shehbaz Sharif resisted the IMF’s demands for tax increases and subsidy reductions for months.

    However, Islamabad has begun to yield to pressure in recent days as the threat of national insolvency grows and no friendly nations are ready to give less severe bailouts.

    To manage a growing illicit market in US dollars, the government relaxed limitations on the rupee, which led to the currency falling to historic lows. Additionally, artificially low petrol costs have increased.

    “We’re at the end of the road. The government has to make the political case to the public for meeting these (IMF) demands,” former World Bank economist Abid Hasan told AFP.

    “If they don’t, the country will certainly default and we’ll end up like Sri Lanka, which will be even worse.”

    Last year, Sri Lanka entered into debt default and experienced months of food and fuel shortages that led to unrest and finally forced the nation’s government to depart the country.

  • Intraday update: Pakistani rupee drops to all-time low of Rs270 against US dollar

    Intraday update: Pakistani rupee drops to all-time low of Rs270 against US dollar

    According to information provided by the Forex Association of Pakistan (FAP), the Pakistani rupee depreciated by an additional Rs7.4 after falling to a record low last week, trading at Rs270 per dollar in the interbank market at approximately 1:30 pm on Monday.

    From Friday’s close of Rs262.6, this represents a loss of more than 2.5 per cent.

    The decline of the rupee was blamed on a lack of dollars by Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP). He said that the dollar supply had not been resumed. Even though there is no agreement, we do not know where the banks will obtain their supplies.

    The SBP deputy governor assured representatives of exchange businesses last week that commercial banks would be instructed to provide money to the exchange companies.

    “There is a lot of panic in the market.” If dollars are received, it will cool down a bit. “As long as the market doesn’t settle, people will not sell their remittances or export proceeds,” Paracha said.

    The current spell of depreciation came after the coalition government ended its control on dollar’s price in order to convince the International Monetary Fund (IMF) officials to revive the $7 billion loan programme.

  • Intraday update: Pakistani rupee drops to Rs268.30, losing more than Rs12 versus US dollar

    Intraday update: Pakistani rupee drops to Rs268.30, losing more than Rs12 versus US dollar

    Pakistani rupee (PKR) continued its downward trend on Friday, with the rupee declining over Rs12 versus the US dollar in the interbank market. The local currency was trading at Rs268.30, compared to yesterday’s close of Rs255.43 in the interbank market.

    The dollar has gained Rs30.41 in the interbank market since Thursday as exchange companies removed the dollar cap, a key demand of the IMF as part of a bailout programme agreed upon in 2018.

    PKR fell to Rs265 against the US dollar in the open market, a decline of Rs3 compared to the day before.

    The removal of the cap on the dollar rate took the currency market by surprise and resulted in extreme volatility. Experts termed it a “much-awaited adjustment” and predicted that it would help in increasing export proceeds and inward remittances through legal banking channels.

    The difference in rates between the interbank and open markets owing to the price cap removal, which had widened to Rs15 in recent months, was almost wiped out.

    The country’s foreign exchange reserves have depleted to a critical level, falling to $3.678 billion in the week ending January 20. This is not enough to finance even three weeks of imports.

    This is a developing story and will be updated after interbank closing.