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Rupee depreciates against dollar for fifth straight session

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  • Rupee closes at 224.40 against dollar.
  • Local unit loses 0.01% against greenback.
  • It comes after forex reserves fell to four-year-low.

The Pakistani rupee Friday registered losses against the US dollar for the fifth straight session in the interbank market as the central bank-held foreign exchange reserves fell over 10% week-on-week.

The local unit closed at 224.40 against the greenback after losing 0.01% compared to Thursday’s close of 224.37, data released by the State Bank of Pakistan (SBP) showed.

The development comes after foreign exchange reserves held by the State Bank of Pakistan (SBP) plunged to an alarming level after falling 10.45% to a four-year low.

The foreign currency reserves held by the SBP were recorded at $6,714.9 million as of December 2, down $784 million compared with $7,825.7 on November 25, data released by the central bank showed.

The reserve crisis has raised fears that the country might not be able to meet its foreign debt payments, however, SBP Governor Jameel Ahmad believes that Pakistan can repay its debts.

In the latest episode of the SBP podcast series, Ahmad reiterated that all debt repayments were on track and that country’s foreign exchange reserves were expected to increase in the second half of the current fiscal year.

Commenting on the severity of the dollar crunch, the Ministry of Finance’s former adviser Dr Khaqan Hassan Najeeb, said that it was important to consider that Pakistan had only received $4 billion in the last five months (July-November 2022) — this was beside the rollover.

“The slow inflow of funds, heavy payments — including Sukuk payment — and a less than satisfactory financial account have all added pressure on the reserves which now barely cover a month and 10 days of import payment,” he stated.

But that’s not it as the International Monetary Fund’s (IMF) programme is also stalled after Pakistan did not meet the all requirements for the ninth review.

Finance Minister Ishaq Dar has constantly assured that the country will successfully complete the IMF programme. The country is in desperate need of external financing as the IMF’s review for the disbursement of its next tranche of funding has been delayed since September.

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Changes in the US dollar’s value are directly correlated with variations in gold prices.

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The price of 24-karat gold in Pakistan increased by Rs1500 on Thursday, reaching Rs231,000 per tola. This was another jump in the price of gold in the country.

Dealers reported a comparable surge in the price of 10 grams of 24-karat gold, which is currently trading at Rs198,045 after rising by Rs1285. In addition, the cost of ten grams of 22-karat gold increased significantly, trading at Rs 181,541.

These fluctuations are strongly correlated with shifts in the US dollar’s value, demonstrating the tight connection between gold prices and exchange rates. This emphasizes how local gold markets are impacted by variables related to the global economy.

At Rs2,580, the price of 24-karat silver remains steady right now. The price of gold increased significantly on a global scale as well, rising by $14 to $2,214 per ounce.

It’s critical to understand that changes in the worldwide market can have a substantial impact on gold prices in Pakistan throughout the day. The gold rates that are offered are obtained from reliable sources, mostly situated in Karachi and Multan.

It is recommended that individuals seek the advice of nearby gold merchants and jewellers for the most precise and current information regarding gold prices.

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Pakistan pledged to finish building the TAPI gas pipeline.

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The minister discussed the importance of the TAPI gas pipeline project for Pakistan’s energy needs during a meeting with Turkmenistan’s ambassador to Pakistan, Atadjan Movlamov.

The Minister was congratulated by Ambassador Movlamov on taking office and his commitment to the project was noted.

Dr. Musadik Malik thanked the ambassador for his kind words, acknowledged the support, and promised to maintain the two nations’ friendship. The intergovernmental commission and working group meetings for the project this year were briefed by Atadjan Movlamov.

He invited the Minister to attend the Turkmenistan Energy Forum, which would take place in Paris the following month.

TAPI undertaking
The project is for the construction of a 1,680-kilometer pipeline with a 56-inch diameter that can carry 3.2 billion cubic feet of gas per day (bcfd) from Turkmenistan through Afghanistan and Pakistan to the border between Pakistan and India.

According to the terms of the TAPI agreement, Afghanistan would receive its portion of 0.5 billion cubic feet of gas per day, while Pakistan and India will each receive 1.325 billion cubic feet of gas per day.

In order to carry out the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, Pakistan and Turkmenistan inked a cooperative implementation plan in Islamabad on June 4.

Prime Minister Shehbaz Sharif and a delegation from Turkmenistan, led by Minister of Energy and Water Resources Daler Juma’a, were present at the ceremony.

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The price of gold is still rising in Pakistan.

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According to the All Sindh Sarafa Jewellers Association, the cost of 10 grams of 24 karat gold grew by Rs. 86 to Rs. 196,760 from Rs. 196,674, while the cost of 10 grams of 22 carat gold jumped to Rs. 180,363 from Rs. 180,284.

The price of silver per tola and ten grams stayed at Rs. 2,211.93 and Rs. 2,580, respectively.

According to the Association, the price of gold on the global market rose by $7 to $2,200 from $.2,193.

It is important to note that Pakistani and IMF personnel have agreed at the staff level on the second and final review conducted as part of Pakistan’s Stand-By arrangement.

The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on the second and final review of Pakistan’s stabilization program, which is supported by the IMF’s US$3 billion (SDR2,250 million) SBA Agreement. This is according to the official statement released by a team led by Nathan Porter.

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