The Pakistani rupee continues to fall for the third session in a row in the interbank trade today.
The local currency eased by Re0.22 or 0.10% versus the dollar to close at 221.91 compared to Monday’s close of 221.69.
“Rising dollar demand, foreign funding drought and political ferment weighed on the rupee,” says a currency dealer.
KARACHI: The Pakistani rupee maintained its downward trend against the US dollar for the third consecutive session in the interbank market on Tuesday.
The local unit eased by Re0.22 or 0.10% versus the dollar to close at 221.91 compared to Monday’s close of 221.69, the State Bank of Pakistan (SBP) data showed.
Traders pinned this downtrend to lean foreign exchange reserves amid rising imports, while the decline was also attributed to an increase in demand for the greenback from importers.
“Rising dollar demand, foreign funding drought, increase in country’s default risk, and political ferment weighed on the rupee,” said a currency dealer.
Moreover, the postponement of Saudi Crown Prince Mohammad bin Salman’s visit to Pakistan and the rescheduling of talks between the International Monetary Fund (IMF) and Islamabad for the completion of the ninth review of the IMF’s bailout package hurt investor sentiment.
Dealers expect the rupee to remain range-bound in the coming sessions, depending on the demand and supply of the dollars in the market.
As of November 4, the forex reserves held by the SBP fell by $956 million.
As a result, reserves held by the central bank have fallen to as low as $7.9 billion, enough to cover less than six weeks of imports. The reserves declined on external debt servicing, according to the SBP.
Remittances from abroad dropped by 8.6% to $9.9 billion in the first four months of the current fiscal year. In October, the cash transfers fell to $2.2 billion, a 15.7% decrease from a year earlier. In October, remittances have fallen by 9.1% month-on-month.
Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.
Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.
With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.
In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).
Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.
The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.
The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.
According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”
The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.
Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.