Business

Pakistan-IMF deal: PKR expected to remain steady next week

Published

1 year ago

Farwa

Positive impact of Pakistan-IMF deal on rupee.
Dealers expect balanced inflow, outflow of dollars.
IMF board to meet on July 12 for loan approval.

KARACHI: The rupee is expected to remain steady next week as the currency market hopes for the approval of Pakistan’s bailout package by the International Monetary Fund’s (IMF) Executive Board on July 12.

According to a report published in The News, dealers said on Saturday that dollar inflows and outflows are likely to be balanced.

In the interbank market, the local unit rose by 2.8% or Rs8 week-on-week.

“Over the course of the next week, the rupee is probably not going change much. The quantity of foreign currency that banks generate (via exports and remittances) must equal the amount of import payments before releasing them,” said an analyst.

“By using this strategy, the current account deficit is kept under check, and unrestricted imports are avoided,” the expert noted, adding that the State Bank of Pakistan (SBP) seemed to monitor the current account actively.

Once inflows from the IMF and friendly nations are received, it is feasible that imports may be permitted more freely.

However, according to the analyst, because payments are increasingly being accepted, businesses are not encountering substantial import delays.

Currency experts hope that the IMF will most likely approve the standby arrangement during its Executive Board meeting on July 12 and that $1.1 billion will be credited to the SBP account by July 18.

Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan, the key opposition figure in Pakistan and a former prime minister, met the IMF team on Friday at his residence in Zaman Park, Lahore.

Khan voiced his support for the bailout deal with the global lender but sought guarantees for timely elections in the country.

The IMF stated that it was seeking the backing of Pakistan’s political parties, including Khan’s, for the new nine-month $3 billion stand-by arrangement and the policies linked with the programme in the run-up to the country’s autumn elections.

“The market does not expect any drastic movement in USD-PKR parity,” said Tresmark — a financial portal for treasury markets — in a note.

“Our last week’s projections of 275-280 till IMF approval and 282-287 post-IMF approval still hold,” it added.

The views were based on potentially significant inflows catalysed by the IMF agreement, the rupee being undervalued on a REER basis, elevated interest rates, continued management of imports, increased forex reserves on account of favourable current account deficit, and SBP’s key objective to build reserves rapidly.

Pakistan’s foreign exchange reserves held by the central bank increased by $393 million to $4.462 billion in the week ending June 30.

The country’s dollar bonds saw a correction during the outgoing week. Following the positive response to the Pakistan-IMF agreement, the country experienced a significant upswing in its international bond prices, reflecting heightened investor confidence, according to JS Global.

“However, there has been a correction in bond prices and yields this week,” it said. “Bond prices are showing on average a 7% day-on-day decline as per current prices.”

On a cumulative basis, the increase in international bond prices averaged around 26% since the recent low of June 23, 2023, JS Global stated.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

2 days ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

In interbank trade, the Pakistani rupee beats the US dollar.

Published

1 week ago

Farwa

In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

Published

1 week ago

Farwa

The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.