Business

Rupee continues recovery against dollar on hopes of IMF deal within few days

Published

1 year ago

Farwa

The rupee gained further ground against the US dollar as Pakistan was able to secure $500 million from the Industrial and Commercial Bank of China (ICBC) and the expectation of striking a deal with the International Monetary Fund (IMF).

The local currency gained by Rs3.46 against the greenback in the interbank market during the intraday trade. The local unit was seen changing hands 275 at around 11:47pm.

The rupee closed the week on Friday by gaining significant ground against the US dollar. According to the State Bank of Pakistan (SBP), it appreciated by Rs6.63, or 2.38% in the interbank market and closed at 278.46.

Speaking to Geo.tv, Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha citing a few reasons for the earlier dollar appreciation said that the hype was created by the country’s financial institutions and international players that manipulated and caused the rates to increase.

“Currently, the dollar decreased against the rupee due to the market correction and it is still in the ebb and flow. Financial credentials cannot be changed in one day which can cause the currency to depreciate or appreciate at such a scale,” said Paracha.

The destabilised currency damages Pakistan’s image and foreign direct investment (FDI) and local investors are discouraged due to this reason, he added.

He anticipated that keeping in view the IMF agreement and the inflows from the friendly countries, the dollar should remain in the range of 260 to 265.

Paracha also mentioned that the political condition of Pakistan has been impacting the dollar rates which never had happened before. This time we are on the very weaker side that’s why IMF is also pushing us, he noted.

He also highlighted that the financial conditions are not bad as it is being indicated. Our inflow is $50 billion and our outflow is $60 billion, he said, adding that Pakistan requires $10 to 15 billion which has been halted.

“If we had managed it well, reducing our expenditures and the subsidies of $17.4 billion which the government gives to our elites then it would make a huge impact”, he maintained.

There is a very dire need of increasing our tax base, not the tax rate. No one except the salaried class and big companies pay the tax. Therefore, the government need to increase the tax base, he concluded.

Earlier today, a government official expressed hope of striking a deal with the Washington-based lender.

Another official assured that Pakistan was expecting to strike the staff-level agreement (SLA) with the IMF in the next few days, however, the Fund was reluctant to give any time frame for finalising the agreement.

Business

Pakistan’s gold prices are still declining; see the most recent

Published

2 days ago

Farwa

The price of 10-gram gold reduced by Rs943 to settle at Rs207,733, while the price of gold dropped by Rs1200 to close at Rs242,300 a tola, according to the Sindh Sarafa Jewellers Association.

In the global market, the price of the precious metal fell by $10 to $2,349 per ounce, resulting in losses.

At 04:48 GMT, the spot price of gold had dropped by 0.2% to $2,354.77 per ounce. In the previous session, prices reached a two-week high.

American gold futures dropped 0.6% to $2,361.

Spot silver decreased by 0.4% to $28.03 per ounce, while palladium remained steady at $978.03 and platinum decreased by 0.1% to $992.89.

Business

Pakistan and the IMF begin talks for a new loan.

Published

2 days ago

Farwa

Pakistan is requesting a $6 to $8 billion bailout package from the international lender over the next three to four years to address its financial troubles.

A mission team led by Nathan Porter, the IMF’s Mission Chief in Pakistan, is meeting with a Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

According to sources familiar with the situation, Islamabad may face more difficult options, such as raising power and gas bills.

Mr. Aurganzeb informed the IMF team that the country’s economy has improved as a result of the IMF loan package, and Islamabad is ready to sign a new loan programme to further develop.

The IMF mission expressed satisfaction with Islamabad’s efforts to revive the country’s struggling economy.

The IMF praised Pakistan’s economic growth in its staff report earlier this week, but warned that the outlook remains challenging, with very high downside risks.

The country nearly avoided collapse last summer, and its $350 billion economy has stabilized since the end of the last IMF program, with inflation falling to roughly 17% in April from a record high of 38% last May.

Business

Petrol prices are likely to drop significantly beginning May 16.

Published

2 days ago

Farwa

According to sources, the government is set to decrease petrol prices by Rs 14 per litre and diesel prices by Rs 10 on May 16 for the next fortnight’s revision.

Last month, the government reduced the price of fuel and high-speed diesel by Rs5.45 and Rs8.42 per fortnight, respectively.

The current fuel price is Rs288.49 per litre, while the HSD price is Rs281.96.

Meanwhile, oil prices fell further on Monday, as signs of sluggish fuel consumption and comments from U.S. Federal Reserve officials dimmed optimism for interest rate reduction, which may slow growth and reduce fuel demand in the world’s largest economy.

Brent crude prices down 25 cents, or 0.3%, to $82.54 a barrel, while US West Texas Intermediate crude futures fell 19 cents, or 0.2%, to $78.07 per barrel.

Oil prices also declined on signals of poor demand, according to ANZ analysts, as gasoline and distillate inventories in the United States increased in the week before the start of the driving season.

Refiners throughout the world are dealing with falling diesel profitability as new refineries increase supply and warm weather in the northern hemisphere and weak economic activity reduce demand.