Business

Dollar weakens after govt’s warning to reign in currency speculation

Published

2 years ago

Farwa

Rupee gains against dollar for sixth consecutive session.
Rupee appreciates by Rs1.62 to reach 228.45 per dollar.
Expectation of Pakistan receiving flood relief also driving factor.

KARACHI: The government’s warning to reign in currency speculation again pushed down the US dollar’s slide against the Pakistani rupee for the sixth consecutive session on Friday.

In the interbank market, the local unit appreciated by Rs1.18 to reach 228.45 per dollar, according to the State Bank of Pakistan up from the previous session’s close of 229.63.

Right after taking charge of the finance ministry earlier this week, Senator Ishaq Dar said that no one would be permitted to manipulate the foreign exchange market.

The new finance czar — who has strongly favored intervention in currency markets in three previous stints in the job — also claims that the value of the local unit is undervalued and he will seek to control inflation by lowering the interest rates.

The warning seems effective as market participants told The News that currency speculation appears to have decreased and the rupee is now gaining ground as a result of this.

Muhammad Saad Ali, a capital market expert, told Geo.tv that it was indeed Dar’s warning of reigning in speculation in the currency market that was driving the dollar’s free fall.

But the depreciation was not limited to the warning as Pakistan is also set to receive external financial assistance in terms of flood relief, which will in turn support the exchange rate, Ali said.

Although the currency has been witnessing appreciation against the greenback, Pakistan’s exports are still not at an ideal position and it is feared that in the coming days, the country will have to import commodities as a result of floods — shrinking the forex reserves.

The floods have also raised questions on whether Pakistan will be able to pay its debts on time, with the local currency not at a desirable stage against the dollar and the forex reserves diminishing over time.

In this regard, Prime Minister Shehbaz Sharif and Foreign Minister Bilawal Bhutto-Zardari have sought climate justice to compensate for the destruction as the disaster was climate-induced — and Pakistan produces one of the lowest carbon emissions in the world.

In line with the dominant trend over the last several weeks, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) once again declined by 4.07%.

On September 23, the foreign currency reserves held by the SBP were recorded at $8,005.9 million, down $341 million compared with $8,346.4 on September 16, data released by SBP showed on Thursday.

Business

Pakistan has $13.316 billion in total foreign reserves.

Published

3 mins ago

Farwa

The central bank’s foreign reserves rose by $25 million to $8,006 million during the week under review, according to a statement released by the SBP here on Thursday.

It also stated that commercial banks reported holding $5,310 million in net foreign reserves. As of the previous week, which ended on April 19, 2024, the nation had $13,280.5 million in total liquid foreign reserves.

Among them, the central bank had foreign reserves of $7,981.2 million, while commercial banks had net foreign reserves of $5,299.3 million.

According to the State Bank of Pakistan (SBP), Pakistan got the much expected $1.1 billion last payment from the International Monetary Fund (IMF) as part of the $3 billion standby agreement on Tuesday.

The Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

According to the central bank, the payment will show up in SBP reserves for the week that ends on May 3, 2024.

Business

Support from the US for Pakistan’s IMF pact

Published

39 mins ago

Farwa

Matthew Miller, a spokesman for the department, stated, “We support efforts to stabilize its economy, including reaching an agreement with the IMF.”

He declared, “Our trade and investment ties, as well as our technical engagements, are all priorities of our bilateral relationship, and we will continue to engage with them through their economic success.”

it is important to note that an International Monetary Fund (IMF) delegation will visit Pakistan this month to talk about a new “long-term and larger” loan package designed to assist the government in paying back billions of dollars in debt that is due this year.

Discussions on a new loan plan have been set between Pakistan and the foreign lender. There will be two stages to the meetings: technical discussions and policy-level conversations.

Prior to the upcoming negotiations, Pakistan must overcome formidable economic obstacles, including the collapse of an IMF-proposed tax amnesty program.

As part of the $3 billion standby arrangement, Pakistan recently got the much awaited $1.1 billion last payment from the IMF.

Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

Pakistan is requesting a new, longer-term loan from the IMF, and according to Finance Minister Muhammad Aurangzeb, Islamabad could get an agreement at the staff level on the new program by early July.

Business

FBR Reforms: PM Leading Reforms Process with Law Minister as Top Priority

Published

24 hours ago

Farwa

According to Federal Law Minister Azam Nazir Tarar, Prime Minister Shehbaz is leading the entire reform process, and the Federal Government has made the reforms at the Federal Board of Revenue its top priority.

According to the law minister, who was speaking at a press conference in Islamabad, there are presently one billion rupees worth of tax cases pending in court. The parliament has for the first time passed legislation on tax tribunals in an effort to streamline and accelerate the legal process.

He stated that, strictly according to merit, there have already been a few postings and transfers in the FBR and that more are anticipated in the next few days.

Federal Information Minister Atta Tarar, who accompanied the Law Minister, stated that Prime Minister Shehbaz Sharif is spearheading an effective foreign policy through productive meetings with world leaders.

He declared the premier’s trip to Saudi Arabia, where Shehbaz Sharif met with government representatives and corporate executives who indicated interest in investing in Pakistan, a success.

Atta Tarar also declared that a commercial team from Saudi Arabia would be visiting soon.