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Rupee’s woeful ride continues, depreciates to settle at 223.66 against dollar

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2 years ago

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  • Rupee value has cumulatively decreased by 1.01% in past seven working days.
  • Local unit settles at Rs223.66 against the dollar in interbank market today.
  • Analysts say demand for imports is strong which is also increasing the parity as well.

KARACHI: Pakistan’s rupee continued to sustain losses against the US dollar for the seventh successive session, settling with a depreciation of 0.22% in the interbank on Monday, as investors remained concerned over the ninth review of Pakistan’s economy by the International Monetary Fund (IMF).

The currency lost 0.22% (or Re0.49) to close at Rs223.66 against the US dollar in the interbank market compared to Friday’s close of Rs223.17. 

Meanwhile, in the open market, it settled at Rs231 losing Rs1.5 against the greenback compared to Friday’s rate of Rs229.5.

Analysts believe that the following issues have resulted in the rupee sliding, these include:

  • Uncertainty over the ninth review by IMF
  • Growing risk of defaulting on its obligations to repay foreign debt despite Finance Minister Ishaq Dar’s reassurance
  • Absence of a timeframe regarding incoming financing from Saudi Arabia and China 

The rupee has cumulatively decreased by 1.01% (or Rs2.24) in the past seven working days, compared to the November 10 close at Rs221.42, according to the State Bank of Pakistan’s data.

Speaking to Geo.tv, Pakistan-Kuwait Head of Research Samiullah Tariq said demand is higher than supply, and US interest rates have increased which has dried up liquidity.

Therefore, the demand for imports is strong which is also increasing the parity as well.

Globally, the US dollar was firmly higher against major currencies on Monday, as rising COVID-19 cases in China led to new restrictions and weighed on global investor sentiment.

The dollar was up 0.5% against Japan’s yen at 141.07, its highest since November 11. Meanwhile, the euro was 0.62% lower against the greenback at $1.026.

The dollar index, which tracks the currency against major peers, has slid more than 6% from a 20-year high in October. Last month, a fall in the US inflation rate has driven bets that the US Federal Reserve will slow down its interest rate hikes.

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Business

Trade ties between Pak-Oman: Both nations decide to activate “Joint Business Council”.

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22 hours ago

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Jam Kamal Khan, federal minister for commerce, visited Oman Chamber of Commerce and Industry in Muscat alongside chairman Faisal Abdullah Al Rawas.

To enable closer economic collaboration, both sides decided during the meeting to activate joint Business Council between OCCI and the federation of Pakistan Chambers of Commerce and industry.

Concurrent with the conference, the Embassy of Pakistan arranged a b2b networking event in association with OCCI to gather Omani Businessmen and Pakistani Business Delegates investigating trade prospects.

Speaking on the occasion, Jam Kamal Khan said, “Our present trade figures do not fairly represent the depth of our connection. We can quickly raise the current Trade volume to two or three times its present level by just eliminating logistical and communication barriers.

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Business

Despite economic gains, PSX remains strong.

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22 hours ago

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Amidst the ongoing negotiations with the International Monetary Fund (IMF) regarding a loan tranche, the Pakistan Stock Exchange (PSX) has resumed its upward trajectory in recent days.

The KSE-100 Index gained 600 points on Friday, the penultimate working day of the business week, and then increased to 115,730 points as traders showed confidence and engaged in trading.

After experiencing fluctuations, the PSX gained strength on Thursday, as the major index surpassed 115,000 points.

The KSE 100-Index closed at 115,094.23 points after gaining 1,009.70 points, or 0.89 percent. 115,247.39 was the intraday high, and 14,429.93 was the lowest.

According to experts, one important factor is Moody’s Ratings’ upgrade of Pakistani banks. Investor confidence has also increased due to the expectation of a positive conclusion from the negotiations with the International Monetary Fund (IMF).

In its assessment, Moody’s stated, “We have shifted our outlook on Pakistan’s banking system from stable to positive to reflect the banks’ resilient financial performance as well as improving macroeconomic conditions from very weak levels a year ago.”

The major index of the Pakistan Stock Exchange (PSX) surpassed 115,000 on Thursday, indicating a surge in the market.

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Pakistan resolves to meet benchmarks, and the IMF promises economic help.

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In the midst of an ongoing economic review, the delegation from the International Monetary Fund (IMF) has promised Pakistan economic cooperation.

In order to assess the delivery of a $1 billion tranche under the $7 billion rescue deal, IMF officials are now in Pakistan.

Today, March 14, marks the completion of the two-week-long economic review and negotiations between the global lender’s representatives and Pakistani authorities.

The team met with Finance Minister Muhammad Aurangzeb at the Ministry of Finance for the last round of negotiations.

The nation’s economic team’s actions and performance were praised by the visiting officials.

Aurangzeb promised the IMF during the conference that all economic goals would be met. He said that as long as the loan program is in place, no goals would be broken.

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