Business

Rupee depreciates on low dollar inflows for second consecutive month

Published

1 year ago

Farwa

Country’s ability to generate dollar loans shrank to normal: official.
Loans disbursement remained low in last 2 months.
Pakistan secured $3.52bn in July-September period.

The local currency has started depreciating against the US dollar as Pakistan received low dollar inflows in the shape of loans during the consecutive second month of September 2023, The News reported on Thursday.

In the first month, July 2023, Pakistan received $2.89 billion as reported by the Economic Affairs Division (EAD) but, if a disbursed loan of $1.1 billion by the IMF under the $3 billion Standby Arrangement (SBA) is included, the total disbursement touches the $4 billion mark.

“The country’s ability to generate dollar loans have shrunk to normal in the last two months, August and September, in which the disbursement of loans remained at $316 million and $320 million respectively,” sources confirmed to The News on Wednesday.

The military establishment, in consultation with intelligence agencies and law-enforcement agencies, launched a crackdown on moneychangers and speculators and the rupee-dollar parity improved substantially, but there was a limit to taking such administrative measures.

The economic managers failed to complement these administrative steps to ensure dollar inflows and after witnessing shrinking inflows, the administrative measures lost charm. So the rupee is depreciating against the US dollar again.

The dollar inflows in July 2023 witnessed a massive boost when after securing $1.1 billion from the IMF under the $3 billion SBA programme, Pakistan also obtained $2 billion in additional deposits from the Kingdom of Saudi Arabia. The government also secured guaranteed loans of $508.34 million for induction of fighter aircraft.

So far in the first quarter, July-September period, Pakistan secured $3.52 billion from all multilateral and bilateral creditors in the current fiscal year against $2.234 billion in the same period of the last financial year. The EAD had included disbursement of $1.16 billion from the IMF as part of its disbursement showed in July 2022, but the amount released by the IMF in July 2023 was not made part of the EAD-released foreign loans.

The multilateral creditors disbursed $490.48 million during the first quarter of the current fiscal year as the ADB provided $61.7 million and Asian Infrastructure Investment Bank (AIIB) $22.96 million. The EU and European Investment Bank (EIB) have not disbursed any amount so far in the current fiscal year.

The World Bank’s IDA lending stands at $240.93 million in the first quarter of the current fiscal year, while IBRD funding is hovering around $58.45 million in the same period of the current fiscal year. The Islamic Development Bank (IsDB) has so far disbursed $100 million for short-term goals in the current fiscal year.

Total disbursement from bilateral creditors stood at $324.05 million during the first quarter, July-September period of the current fiscal year, out of which the Kingdom of Saudi Arabia clinched the top position by making disbursement of $300 million loan in the shape of an oil facility on deferred payment.

China has disbursed just $0.39 million in the first quarter, $1.28 million by France, $0.77 million by Germany, $2.82 million by Japan, $4.85 million by Korea and $13.98 million by USA.

Through the Naya Pakistan Certificate, Pakistan has received $204.5 million in the first quarter of the current fiscal year. Pakistan also received a $2bn deposit from the KSA in the first three months of the current fiscal year. The government has so far remained unable to get any single penny through commercial loans despite making a projection of $4.5 billion and the same applies in the case of generating dollars through international bonds.

The government has sought $17.6 billion in the shape of foreign loans for the whole financial year.

Now Islamabad would have to secure $14.1 billion in the remaining three quarters (Oct to June) to materialise the desired target to keep the foreign exchange reserves at comfortable levels. Otherwise, the balance-of-payment crisis might erupt anytime in case of derailment of the IMF programme.

Business

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

Published

19 hours 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.