KARACHI: The Pakistan rupee lost ground against the US dollar Monday ahead of the monetary policy announcement — scheduled for today — and the speculations surrounding the International Monetary Fund (IMF).
In the interbank market, the rupee fell 2.01 or 0.93% against the dollar to close at 216.66, down from Friday’s close of 214.65, according to data from the State Bank of Pakistan (SBP).
The greenback traded at 213-214 during the outgoing week. It closed at 213.98 per dollar on Monday and finished at 214.65 on Friday. The rupee fell 0.31% against the greenback last week.
Economist and former adviser to the federal ministry of finance Dr Khaqan Hassan Najeeb said the local unit slipped by Rs2 against the dollar due to political developments and the strengthening of the dollar internationally.
“But we also know the economic situation remains challenging. SBP reserves are weak at $7.8 billion — hardly enough for over a month of imports,” he said.
Non-oil imports are curbed by SBP by rationing the opening of letter of credit (LC), the economist said, adding that oil is already in excess, so oil imports are low.
“Point being, we are operating in a restricted environment, and there would be import needs piling up.”
Getting flows including IMF money, multilateral and bilateral monies, and new foreign direct investment (FDI) is essential to normalise the balance of payments.
“Of-course exports drop and remittance slowdown in July must be looked at carefully.”
Talking to The News, a trader said that apart from forex inflows and outflows, the monetary policy decision will be instrumental to gauge the rupee’s future direction.
Another factor that weakened the rupee was a shortage of greenback in the open market, which moved up the rate of the interbank price of the dollar as well.
The government lifted a ban on the import of non-essential and luxury goods to meet a condition of the IMF ahead of the board’s meeting later this month to revive the loan programme.
However, it announced the imposition of heavy duties on completely built units cars, mobile phones, and electronic appliances to discourage imports.
The market will also evaluate the impact of opening up luxury imports on the rupee, according to traders.
The foreign currency reserves have started to recover. The foreign reserves held by the central bank slightly increased by $67 million or 0.9% to $7.9 billion as of August 12.
The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.
Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.
Within the last 12 to 14 months, the minister saw a considerable improvement in macroeconomic stability. With the help of foreign exchange reserves sufficient to cover two months’ worth of imports, Pakistan steadied its currency, decreased its current account deficit to less than $1 billion, and produced a primary surplus.
Strong remittances, expanding exports, and a drop in inflation from 38% to 6.9% have all contributed to the consolidation of these benefits, according to Muhammad Aurangzeb. Companies have also profited from the insurance rate reduction.
Even if Pakistan’s credit rating has improved, more work needs to be done to bring it up to at least a B-. Both on the debt and equity sectors, he claimed, institutional flows were returning to the nation.
As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.
He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.
The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.
The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.
thus,Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.
Within the last 12 to 14 months, the minister saw a considerable improvement in macroeconomic stability. With the help of foreign exchange reserves sufficient to cover two months’ worth of imports, Pakistan steadied its currency, decreased its current account deficit to less than $1 billion, and produced a primary surplus.
Strong remittances, expanding exports, and a drop in inflation from 38% to 6.9% have all contributed to the consolidation of these benefits, according to Muhammad Aurangzeb. Companies have also profited from the insurance rate reduction.
Even if Pakistan’s credit rating has improved, more work needs to be done to bring it up to at least a B-. Both on the debt and equity sectors, he claimed, institutional flows were returning to the nation.
As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.
He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.
The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.
In September of this year, the State Bank of Pakistan reported that remittances from overseas Pakistanis amounted to 2.8 billion dollars, reflecting a 29% increase compared to the remittances received in September of the previous year.
The SBP reports that, with a cumulative inflow of 8.8 billion US dollars in the first quarter of the financial year, workers’ remittances increased by 38.8 percent compared to the first quarter of the previous year.
Remittance inflows in September 2024 were primarily derived from Saudi Arabia at $681.3 million, the United Arab Emirates at $560.3 million, the United Kingdom at $423.6 million, and the United States of America at $274.9 million.