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Rupee continues to dip as import payment pressure weighs

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2 years ago

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  • Rupee closes at 224.11 against US dollar in interbank market.
  • Local currency lost 21% against the greenback so far in 2022.
  • Analysts expect the rupee to reach 270 against dollar by June 2023.

Pakistani rupee remained under pressure on Tuesday as demand from importers seeking to pay their bills increased in the market.

The rupee closed at 224.11 against the US dollar after registering a meagre decline of 0.09% in the interbank market compared to Monday’s close of 223.91.

A currency dealer explained that banks are often urged to only settle import amounts that match the bank’s export amounts. The interbank market’s equilibrium is preserved by managing demand and supply.

Moreover, investors kept a close eye on the talks between Pakistan and the International Monetary Fund (IMF) which are currently at a stalemate.

An IMF review for the release of the next tranche under bailout funding has been pending since September.

Federal Minister for Finance and Revenue Ishaq Dar claimed last week that Pakistan met all targets for the review. However, the IMF resident chief said discussions with the Pakistani “authorities in these areas are ongoing, especially as not all end-September quantitative targets have been met”.

Pakistan made a payment of $1 billion Sukuk on Friday. However, the investors remained concerned about a fast depletion of the foreign reserves amid dried dollar inflows. The loss of foreign exchange reserves is unquestionably caused by the servicing and repayment of the debt.

Despite the rupee’s 21% decline against the greenback so far in 2022, there is a lot of uncertainty surrounding the Pakistani currency. Since 2019, Pakistan has adopted a market-based exchange rate regime. 

Even though the official exchange rate has recently remained in the Rs221-225 range, the black market rate is currently trading at a premium of more than 10% at Rs240-250, The News reported.

Except for a few currencies available to travellers at a premium of 3%, there is scarcely any foreign currency supply in that market as a result of the central bank’s strict regulations for exchange companies. 

The resurgence of the black market has been badly affecting dollar inflows, particularly inward remittances. Analysts expect the rupee to reach 270 against US dollar by June 2023.

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

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6 days ago

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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.

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Business

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

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1 week ago

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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.

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Business

The inflation rate in Pakistan dropped to its lowest level.

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1 week ago

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On December 2, core inflation as determined by the Consumer Price Index (CPI) significantly slowed, falling to 4.9% in November 2024 from 7.2 percent in October 2024.

The CPI-based inflation rate for the same month last year (November 2023) was 29.2%, according to PBS data.

Compared to a 1.2% gain in the prior month, it increased by 0.5% month over month in November 2024.

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