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Rupee’s clawback against US dollar persists



  • Local unit closes at Rs220.65 against dollar.
  • Rupee gains on expectations of a fresh loan tranche from IMF.
  • Analysts anticipate rupee will rise further.

KARACHI: October’s best-performing currency continued to gain against the US dollar Tuesday on expectations of a fresh loan tranche from the International Monetary Fund (IMF).

According to the State Bank of Pakistan (SBP), the local unit gained Rs0.24, or 0.11%, against the greenback in the interbank market, closing at 220.65 compared to Monday’s close of 220.89.

Rupee regained ground following a decline in the Real Effective Exchange Rate (REER) index in September and on expectations of a fresh loan tranche from the Washington-based lender.

REER index depreciated to 90.9 in September, compared with 94.4 in the previous month, the State Bank of Pakistan reported on Sunday. The REER index shows the rupee might strengthen further in the coming days.

In addition, the expectation that Pakistan would meet its obligations to pay off its foreign debt on schedule contributed to a surge in the price of Pakistani sovereign bonds, which helped buoy sentiments regarding the local unit.

Analysts anticipate that the rupee will rise further as soon as World Bank inflows begin coming in as well. Meanwhile, Prime Minister Shehbaz Sharif is in Beijing to hold talks on the rollover of Chinese loans, which now total $26.7 billion and include public and publicly guaranteed debt.

From Asia’s worst to best-performing currency

The Pakistani rupee had one of the strongest performances in Asia in October, rising by 3.3% against the dollar.

The Pakistani currency was closely followed by the Singapore dollar which appreciated by 1.38%, the Philippine peso (1.15%), and South Korean won (0.46%).

The rupee had a successful month. In October, the rupee value increased by 3.3%, said Topline Securities, which cited statistics from Bloomberg. The rupee was one of the best-performing currencies in Asia, it added.

After hitting historic lows in value in both July and August, the rupee suddenly began to appreciate in the final week of September. It started appreciating following the start of Ishaq Dar’s fourth term as Pakistan’s finance minister.

However, the local unit was under pressure on account of the political unrest brought on by the start of the PTI-long march towards Islamabad.

The rupee was able to gain ground thanks to Dar’s recent warning to speculators about currency manipulation and the decline of the REER.


Moody’s says the IMF programme will increase Pakistan’s foreign financing.




Moody’s, a reputable international rating agency, has stated that Pakistan’s chances of acquiring funding will increase as a result of the recent agreement with the International Monetary Fund (IMF), which offers dependable sources for that purpose from both friendly countries and international financial institutions.

According to a recent Moody’s analysis on Pakistan’s economy, social unrest and tensions could result from Pakistan’s ongoing inflation. The country’s economic reforms may be hampered by increased taxes and potential changes to the energy tariff, it continued.

Moody’s, on the other hand, agrees that the coalition government headed by Shehbaz Sharif of the PML-N is in danger of failing to secure an election mandate, which may potentially undermine the successful and long-lasting execution of economic reforms.

The government’s capacity to proceed with economic changes may be hampered by societal unrest and poor governance, according to Moody’s.

In order to appease the IMF by fulfilling a prerequisite for authorising a rescue package, the government raised the basic tariff on electricity, which coincided with the most recent increase in fuel prices announced on Monday. This report was released by Moody’s.

Food costs have increased in the nation, where the vast majority is experiencing an unprecedented crisis due to the high cost of living, following the government’s earlier presentation of a budget that included a large increase in income tax for the salaried classes and the implementation of GST on commodities like milk.

The most recent comments were made following Islamabad’s achievement of a staff-level agreement for a $7 billion contract that spans 37 months and is contingent upon final approval by the IMF Executive Board.

It states that Pakistan will need foreign financing totaling about $21 billion in 2024–2025 and $23 billion in 2025–2026, meaning that the country’s present $9.4 billion in reserves won’t be sufficient to cover its needs.

Therefore, according to Moody’s, Pakistan is in an alarming position with regard to its external debt, and the next three to five years will be extremely difficult for the formulation and implementation of policies.

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Base Of bilateral relations: China And Pakistan Reiterate Their Support For CPEC




China-Pakistan economic corridor is a major project of the Belt and Road Initiative, and both countries have reiterated their commitment to it. It remains a fundamental aspect of their bilateral relations.

Vice Chairman Zhao Chenxin of the National Development and Reform Commission of China and Minister Ahsan Iqbal of Planning and Development met in Beijing, where Ahsan Iqbal made this assurance.

The summit made clear how committed China and Pakistan are to advancing their strategic cooperative partnership in all weather conditions.

The focus of the discussion was on how the CPEC was going, with both parties reviewing project development and discussing how the agreement made at the leadership level will lead to the launch of an enhanced version of the CPEC.

In order to improve trade, connectivity, and socioeconomic growth in the area, they emphasised the need of CPEC projects.

The Ml-I Project, the KKH realignment, and the Sukkur-Hyderabad motorway—the last remaining segment of the Karachi-Peshawar motorway network—were all to be expedited.

Expanding the partnership’s horizons to include technology, innovation, education, connectivity, and renewable energy sources was another topic of discussion.

Specifically in the special economic zones being built under the Comprehensive Economic Cooperation (CPEX), Vice Chairman NDRC emphasised the possibility of China investing more in Pakistan.

In addition to expressing confidence in the ongoing success of the two nations’ collaboration, Zhao Chenxin reiterated China’s support for Pakistan’s development aspirations.

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Pakistani government raises petrol prices




A recent announcement states that the price of petrol has increased by Rs 9.99 per litre, to Rs 275.60 per litre.

The cost of high-speed diesel has also increased significantly, rising by Rs 6.18 a litre. Diesel is now priced at Rs 283.63 a litre.

Furthermore, kerosene now costs Rs 0.83 more per gallon.

The cost of products and services is predicted to rise in response to the increase in petroleum prices, further taxing household budgets and jeopardizing the stability of the economy.

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