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Dollar gains further ground to near historic high against rupee

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  • Rupee registers losses for 15th consecutive session.
  • Rupee falls to 239.71 after losing 0.03% in interbank market.
  • Local unit is nearing historic low against dollar.

KARACHI: Registering losses for the 15th consecutive session, the Pakistani rupee lost further ground Thursday as the US dollar neared a historic high.

The rupee fell to 239.71 after losing 0.03%, down in value from the previous session’s close of 239.65, in the interbank market..

The rupee now stands only Rs0.23 short of an all-time low level of Rs239.94 on July 28, 2022.

The rupee, which has been one of the worst performing currencies in the emerging markets, has depreciated by nearly 9% so far this month due to wide-ranging factors.

Analyst Yousuf Rahman at KASB Securities told The News that debt servicing was one of the reasons behind the rupee’s decline as gross financing needs for the year are estimated at $32 billion.

Rahman also noted that floods have forced the government to import vegetables, grains, and cotton to replace damaged crops — increasing the pressure on the rupee.

“This has further added strain on the import bill and there have been news of consistent dollar outflows from grey channels, particularly through the Afghanistan border,” Rahman said.

He said the fundamentals and sentiments for the battered rupee won’t improve until anticipated inflows from friendly countries happen.

“Once additional financing is received from the World Bank, ADB [Asian Development Bank], and allied countries, the rupee may stabilise around the 215 mark,” Rahman added.

The revival of the International Monetary Fund (IMF) bailout programme and the release of a $1.1 billion loan tranche from the Fund last month supported the rupee briefly in late August. However, the currency is again struggling.

“Dollar strength and high commodity prices are impacting regional and major currencies,” said Komal Mansoor, the head of research at Tresmark.

“[The] Indian rupee also traded above 80/dollar this week, and they have spent $90 billion to defend their already stable currency. Yuan, euro, and sterling have all depreciated to multi-year lows,” Mansoor said.

But the local currency hitting new lows is worrisome for the economy because it shows the government’s inability to stabilise forex reserves and reverse negative sentiment, he added.

“Some sort of a two-way direction is crucial for the currency”.

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Donald Lu visits Finance Minister Aurangzeb at the World Bank headquarters.

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Wednesday saw Minister for Finance and Revenue Muhammad Aurangzeb meet US Assistant Secretary of State for South and Central Asian Affairs Donald Lu and Principal Deputy Assistant Secretary Elizabeth Horst.

The finance minister briefed US officials on Pakistan’s reform plan at the World Bank. Meeting both delegations decided to improve bilateral ties.

Meeting topics included alternative energy, agriculture, climate, and tech industry. Boosting the Pakistan-US economic partnership was another finance ministry priority.

With US officials, Pakistan’s Finance Minister Muhammad Aurangzeb addressed IT, agriculture, and other business potential.

Pakistan would collaborate with the US International Development Finance Corporation and Exim Bank, according to Muhammad Aurangzeb.

His name is Donald Lu.
Over 30 years of US government service for Lu as a foreign service officer.

What Pakistan calls the “cipher” dispute involves the American official. The Pakistan Tehreek-e-Insaf (PTI) founder claimed that a supposed official letter between Washington and Islamabad proved his ousting as PM was a US conspiracy.

Washington has strongly refuted Khan’s allegations.

The State Department’s top South and Central Asia diplomat is Donald Lu, assistant secretary of state.

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Huge investment potential exists in the telecom and IT sectors. Shaza Fatima

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According to Shaza Fatima Khawaja, Minister of State for IT and Telecommunication, there are numerous investment prospects in Pakistan’s IT and telecom sectors.

She noted that the current administration is dedicated to fostering foreign investment in the nation, in line with the Prime Minister’s goal.

According to a news release, CEOs Wateen Adil Rashid and Muhammad Shahbaz Khan of Taavun (Pvt) Limited, who paid her a visit on Tuesday, spoke with Minister of State for IT and Telecommunication Shaza Fatima Khawaja.

She declared that the private sector would receive complete support because it is essential to growing our exports.

Regarding youngsters, she stated that they are our greatest asset and that efforts are being made to further their growth.

Sheikh Nahyan bin Mubarak Al Nahyan of the United Arab Emirates was thanked by Shaza Fatima for his particular interest in promoting additional investment in Pakistan’s telecom industry.

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WB pledges complete support for changes aimed at stabilizing Pakistan’s economy.

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Federal Minister for Finance and Revenue, Muhammad Aurangzeb, met with President of the World Bank Group, Ajay Banga, according to a press release from the ministry of finance here. During the meeting, the minister discussed Pakistan’s progress under the nine-month Standby Arrangement (SBA) program as well as ongoing reforms in priority areas of taxation, energy, and privatization.

According to the statement, the minister also extended an invitation to the president to visit Pakistan, and both parties acknowledged the necessity of a rolling 10-year country framework plan.

The minister also talked on safeguarding Pakistan’s eligibility for concessional funding and future project pipeline during a meeting with Masatsugu Asakawa, President of the Asian Development Bank (ADB).

The chief executive officer of the US International Development Finance Corporation (DFC), Scott Nathan, also met with the minister of finance.

They discussed during the conference how DFC may increase its investments in Pakistan after resolving unresolved conflicts in a cooperative manner.

According to the minister, the government is supporting creative financing strategies to maximize PPP potential and private sector participation.

According to the statement, he gave his word that the government will do everything in its power to assist investment projects by both foreign and local businesses in Pakistan.

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