Connect with us

Business

Rupee shatters all previous records, falls to new low of 221.99 against dollar

Published

on

  • Pakistani rupee falls by Rs6.79, closes at 221.99 against dollar.
  • This is the highest day-on-day depreciation after June 26, 2019.
  • Import pressure, political uncertainty behind rupee’s downfall.

The Pakistani rupee shattered all previous records on Tuesday, falling to a new low of 224 against the dollar in afternoon interbank trade, before closing at 221.99.

According to State Bank of Pakistan, the local currency fell by Rs6.79 in the interbank market, depreciating by 3.06% against yesterday’s close of Rs215.20.

It was the highest day-on-day depreciation after June 26, 2019 when the currency fell by Rs6.80.

The ruling PML-N’s thumping in the Punjab by-elections has triggered political uncertainty along with import pressure taking the Pakistani rupee on a downward trajectory.

Analysts believe, however, that the domestic political and economic situation are not the only factors at play.

“The dollar is getting stronger in the global market almost against all the world currencies and the Pakistani rupee is not the exception,” said Alpha Beta Core CEO Khurram Schezad.

Speaking of Pakistan’s financial situation, Schezad said that the country’s external account issues “are not settled as yet, the IMF (International Monetary Fund) is yet to be on board, and the flows are yet to materialise”.

“Global rating agencies have put a negative outlook on the economy, so that is an additional burden that is weighing on the financial markets in general and foreign exchange market in particular,” he added.

Exchange Companies Association of Pakistan (ECAP) Chairperson Malik Bostan Malik Bostan told Geo.tv that there were three reasons behind the constant devaluation of the local unit.

The forex expert said that investors are jittery at the moment as the Opposition PTI has bagged more seats than the PML-N in the Punjab by-polls — creating uncertainty over the future of the current set-up.

Bostan said that the speculations that the IMF’s Executive Board approval would take time and the money lender’s statement of being ready to negotiate with a caretaker government have exacerbated the devaluation.

He also pointed out that since the Taliban took over Afghanistan, Pakistan has provided them trade relief, resulting in additional pressure on the rupee.

The currency trader said that the State Bank of Pakistan (SBP) cannot intervene in the rising rupee-dollar parity as the country has agreed that the central bank will not intervene in the matter.

“…but even if it wishes to intervene, the SBP does not have enough dollars to inject into the market,” he said, adding that if the government wants to save the rupee, it will have to curtail the imports.

Business

“Ready to work with Pakistan’s new government,” the IMF said.

Published

on

By

In response to the former premier’s request, IMF Director of Communications Julie Kozak stated, “I’m not going to comment on ongoing political developments,” during a news conference.

She continued by saying that they “look forward to working on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens with the new government.”

In addition to stating that the plan is “supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable,” Kozack said the lender increased the total disbursements under the Standby Arrangement (SBA) to $1.9 billion.

This has been accomplished by closely adhering to budgetary constraints and safeguarding the social safety net. In order to keep foreign exchange reserves growing and rein in inflation, a strict monetary policy stance has been maintained, the speaker stated.

The PTI founding chairman decided to write a letter to the international lender, asking it to demand an audit of the election held on February 8 before it proceeds with discussions with Islamabad for a new loan programme. This move prompted the IMF to release its statement.

In response to the former premier’s request, IMF Director of Communications Julie Kozak stated, “I’m not going to comment on ongoing political developments,” during a news conference.

She continued by saying that they “look forward to working on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens with the new government.”

In addition to stating that the plan is “supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable,” Kozack said the lender increased the total disbursements under the Standby Arrangement (SBA) to $1.9 billion.

This has been accomplished by closely adhering to budgetary constraints and safeguarding the social safety net. In order to keep foreign exchange reserves growing and rein in inflation, a strict monetary policy stance has been maintained, the speaker stated.

The PTI founding chairman decided to write a letter to the international lender, asking it to demand an audit of the election held on February 8 before it proceeds with discussions with Islamabad for a new loan programme. This move prompted the IMF to release its statement.

Continue Reading

Business

In a new IMF agreement, Pakistan would “raise” the FBR tax-to-GDP ratio to 15%.

Published

on

By

The state bank reserves will be maintained at a level equivalent to three months’ worth of import bills, according to sources in the Finance Ministry.

According to sources, the ministry has also set a goal to maintain the primary balance surplus and reduce the current account deficit.

The ministry insisted that once the existing agreement expires, a new one would be negotiated with the IMF, and that the IMF will also be guaranteed that the requirements will be implemented prior to the agreement being finalised.

The founder of Pakistan Tehreek-e-Insaf (PTI) demanded that an audit of the election results be conducted before the International Monetary Fund (IMF) approved any additional loans for Islamabad. However, the IMF showed earlier today that it was eager to cooperate with the new administration in Pakistan by disregarding the demand.

According to Bloomberg News yesterday, Pakistan is to apply for a fresh $6 billion loan from the International Monetary Fund to assist the next government in paying off billions of dollars in debt that comes due this year.

According to the article, the nation would attempt to negotiate an Extended Fund Facility with the IMF, and it was anticipated that discussions with the international lender would begin in March or April.

Thanks to a short-term IMF bailout, Pakistan avoided defaulting last summer. However, the plan expires next month, and the next administration will need to negotiate a long-term deal to keep the $350 billion economy steady.

The IMF forced the South Asian country to enact a number of reforms prior to the rescue, including raising its benchmark interest rate, changing its budget, and raising the cost of natural gas and electricity.

According to a fund spokeswoman, the IMF staff is still in communication with authorities on the necessary longer-term reform initiatives. The fund is also prepared to assist the post-election government in addressing Pakistan’s ongoing issues by means of a new arrangement, should that request be made.

Continue Reading

Business

39% increase in IT exports in January: Dr. Umar Saif

Published

on

By

According to Dr. Umar Saif, the acting minister for information technology and telecommunication, IT exports increased by 39.4% to $265 million in January of this year from $190 million in the same month the previous fiscal year.

The IT sector in Pakistan is expanding and breaking records. The minister wrote on X that “IT exports in January are up by 39.4% to $265 million, compared to $190 million in the same month in 2023.”

The minister also revealed that IT exports to the United States over the first seven months of the current fiscal year (July–January) were $1.7 billion, up 13 percent from $1.5 billion in the same time previous year.

Continue Reading

Trending