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

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

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

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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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The inflation rate in Pakistan dropped to its lowest level.

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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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