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Dollar weakens after govt’s warning to reign in currency speculation

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2 years ago

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  • Rupee gains against dollar for sixth consecutive session.
  • Rupee appreciates by Rs1.62 to reach 228.45 per dollar.
  • Expectation of Pakistan receiving flood relief also driving factor.

KARACHI: The government’s warning to reign in currency speculation again pushed down the US dollar’s slide against the Pakistani rupee for the sixth consecutive session on Friday.

In the interbank market, the local unit appreciated by Rs1.18 to reach 228.45 per dollar, according to the State Bank of Pakistan up from the previous session’s close of 229.63. 

Right after taking charge of the finance ministry earlier this week, Senator Ishaq Dar said that no one would be permitted to manipulate the foreign exchange market.

The new finance czar — who has strongly favored intervention in currency markets in three previous stints in the job — also claims that the value of the local unit is undervalued and he will seek to control inflation by lowering the interest rates.

The warning seems effective as market participants told The News that currency speculation appears to have decreased and the rupee is now gaining ground as a result of this.

Muhammad Saad Ali, a capital market expert, told Geo.tv that it was indeed Dar’s warning of reigning in speculation in the currency market that was driving the dollar’s free fall.

But the depreciation was not limited to the warning as Pakistan is also set to receive external financial assistance in terms of flood relief, which will in turn support the exchange rate, Ali said.

Although the currency has been witnessing appreciation against the greenback, Pakistan’s exports are still not at an ideal position and it is feared that in the coming days, the country will have to import commodities as a result of floods — shrinking the forex reserves.

The floods have also raised questions on whether Pakistan will be able to pay its debts on time, with the local currency not at a desirable stage against the dollar and the forex reserves diminishing over time.

In this regard, Prime Minister Shehbaz Sharif and Foreign Minister Bilawal Bhutto-Zardari have sought climate justice to compensate for the destruction as the disaster was climate-induced — and Pakistan produces one of the lowest carbon emissions in the world.

In line with the dominant trend over the last several weeks, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) once again declined by 4.07%.

On September 23, the foreign currency reserves held by the SBP were recorded at $8,005.9 million, down $341 million compared with $8,346.4 on September 16, data released by SBP showed on Thursday.

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The inaugural flight of Azerbaijan Airlines is between Baku and Karachi.

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The national airline of Azerbaijan launched direct flights from Baku to Karachi today. There will be two weekly flights on this route, on Thursdays and Sundays.

The first flight will land in Karachi, and Azerbaijan’s ambassador, Khazar Farhadov, will be there to greet it.

This evening also marks the departure of the inaugural flight from Karachi to Baku, in addition to the arrival of the flight from Baku.

Azerbaijan Airlines said last month that it would be growing its network and flight operations in Pakistan.

Aviation insiders have verified that Azerbaijan Airlines is preparing to launch service to Karachi in the coming month of April.

In addition to its current services in Islamabad and Lahore, the airline plans to launch its Karachi route on April 18, with the inaugural flight anticipated to depart on that date.

Azerbaijan Airlines has been given permission to operate flights on the Karachi route, according to sources within the Civil Aviation Authority (CAA).

Following a bilateral agreement between the two nations, Azerbaijan Airlines has been given permission to extend its operations in Pakistan.

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Fly Jinnah opens a new route internationally.

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11 hours ago

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Two weekly flights will be the starting frequency of the new route, which will connect the two cities.

According to a representative for Fly Jinnah, the company is pleased to announce the opening of a third international route from Islamabad to Muscat, the capital city of Oman, marking another significant milestone after the successful debut of flights from Islamabad and Lahore to Sharjah.

According to him, this development is in line with our goal of giving our clients more options for reasonably priced, value-driven local and international air travel.

The airline serves five main cities in Pakistan: Karachi, Lahore, Islamabad, Peshawar, and Quetta. Its fleet consists of five Airbus A320 aircraft, all of which are contemporary.

In addition to the current flight path to Sharjah, United Arab Emirates, this new route expands Fly Jinnah’s network of foreign destinations.

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Tajir Dost app: traders don’t seem interested in registering

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12 hours ago

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To tax retailers in Pakistan, the Tajir Dost app was released. The sources stated that the government hopes to tax 3.5 million merchants through the app.

Ajmal Baloch, the president of All-Pakistan Anjuman-e-Tajran, stated that he made reservations with FBR on the SRO within a week.

The Federal Board of Revenue (FBR), according to him, cannot be a “Tajir Dost” because of its unethical actions.

Baloch believed that since electricity bills allow traders to pay a predetermined advance income tax, further taxes are unnecessary.

The trader, according to him, is already paying thirteen different kinds of taxes on the commercial meter. “A trader already pays between Rs. 15,000 and Rs. 20,000 in taxes annually, but you are requesting Rs. 1,200 per month in taxes.”

Mr. Ajmal summoned representatives of the Federal Board of Revenue (FBR) to a meeting with the trade associations to talk about the indirect taxes that the merchants are paying.

Additionally, he claimed that FBR officers are charging the traders, the majority of whom are less educated, “monthly charges.”

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