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

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  • 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.

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The government is about to unleash another gasoline bomb on citizens beaten by inflation

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governmentThe price of petroleum products is anticipated to rise by the Federal Government starting on July 16. The price of gasoline is anticipated to rise by Rs7.67 per litre, the price of high-speed diesel by Rs3.72 per litre, and the price of kerosene by Rs2.73 per litre.

The people have informed me that a proposal to increase the petroleum levy has been created and is pending final clearance from Prime Minister Shehbaz Sharif.

After speaking with the premier, it is expected that the Ministry of Finance will declare the revised petroleum product prices tonight.

Petroleum product prices have recently surged due to rising global oil prices and Pakitsan’s adjustment of the petroleum levy in response to the International Monetary Fund’s (IMF) adamant demands, which forced the country to raise the petroleum development levy in the Finance Bill to Rs70 per litre.

Noteworthy is the fact that on July 1, the authorities also dropped a gasoline bomb.

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Positive Trend at PSX With a 1361-Point Gain for the KSE 100-Index

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In the first few hours of trading, the Pakistan Stock Exchange sees a bullish trend as the KSE 100-Index rises 1361 points, bringing the stock market to over 81,300 points.

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Significant surge in the price of gold in Pakistan

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On Friday, the price of gold in Pakistan continued to increase.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of 24-karat gold per tola has risen by Rs2,200, reaching Rs249,000.

The price of 10-gram 24-karat gold increased by Rs1,886, reaching a total of Rs213,477. On Thursday, the cost of 10 grammes of 22-karat gold was Rs195,687.

The global gold market likewise had a rising trajectory. As per APGJSA, the worldwide rate was $2,404 per ounce, showing a decline of $24 during the course of the trading day.

The local market witnessed constant silver prices at Rs2,900 per tola.

Market observers attribute the increase in gold prices to other variables, such as volatility in the global market, currency exchange rates, and economic conditions. The ongoing surge in gold prices is likely to impact investment choices and consumer behaviour in the near future.

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