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Rupee continues downward spiral for third straight session



  • The Pakistani rupee continues to fall for the third session in a row in the interbank trade today.
  • The local currency eased by Re0.22 or 0.10% versus the dollar to close at 221.91 compared to Monday’s close of 221.69.
  • “Rising dollar demand, foreign funding drought and political ferment weighed on the rupee,” says a currency dealer.

KARACHI: The Pakistani rupee maintained its downward trend against the US dollar for the third consecutive session in the interbank market on Tuesday.

The local unit eased by Re0.22 or 0.10% versus the dollar to close at 221.91 compared to Monday’s close of 221.69, the State Bank of Pakistan (SBP) data showed.

Traders pinned this downtrend to lean foreign exchange reserves amid rising imports, while the decline was also attributed to an increase in demand for the greenback from importers.

“Rising dollar demand, foreign funding drought, increase in country’s default risk, and political ferment weighed on the rupee,” said a currency dealer.

Moreover, the postponement of Saudi Crown Prince Mohammad bin Salman’s visit to Pakistan and the rescheduling of talks between the International Monetary Fund (IMF) and Islamabad for the completion of the ninth review of the IMF’s bailout package hurt investor sentiment.

Dealers expect the rupee to remain range-bound in the coming sessions, depending on the demand and supply of the dollars in the market.

As of November 4, the forex reserves held by the SBP fell by $956 million.

As a result, reserves held by the central bank have fallen to as low as $7.9 billion, enough to cover less than six weeks of imports. The reserves declined on external debt servicing, according to the SBP.

Remittances from abroad dropped by 8.6% to $9.9 billion in the first four months of the current fiscal year. In October, the cash transfers fell to $2.2 billion, a 15.7% decrease from a year earlier. In October, remittances have fallen by 9.1% month-on-month.


ADB approves over $155m loan for Pakistan to support women’s financial access




  • New program to help transform financing ecosystem: ADB
  • $100m loan supports legal and regulatory reforms.
  • Female labour force participation in Pakistan stands at 23%.

The Asian Development Bank (ADB) has approved $155.5 million in financing for Pakistan to support policy reforms aimed at enhancing women’s access to finance and providing credit to women-led micro, small, and medium-sized enterprises.

The development comes days after the ADB approved $658.8 million in financing to support Pakistan’s sustainable growth and help it recover from last year’s cost-of-living crisis.

In a statement on Monday, the Manila-based lender said the latest financing comprises a $100 million policy-based loan that supports legal and regulatory reforms that will help women to better access finance; a $50 million financial intermediation loan that will enable participating financial institutions to lend to women entrepreneurs; and a $5.5 million grant that will finance related activities.

“Inclusive, resilient and sustainable development cannot be achieved if women do not have equal economic opportunities and benefits,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

“ADB’s new program will help transform Pakistan’s current financing ecosystem to help women to access much-needed finance and empower them to boost their livelihoods while contributing significantly to the economy.”

In the statement, the ADB said female labour force participation in Pakistan currently stands at about 23% and the country also has among the lowest rates of women’s entrepreneurship in the world at 4% of female working age adults.

While Pakistan’s financial inclusion has been improving, women are increasingly left behind with a large gender finance gap which currently stands at 34%, it added.

“There are many women entrepreneurs in Pakistan, but they remain unrecognised, being small and informal in nature and lacking the incentives to register their businesses formally or to grow,” said ADB Senior Financial Sector Economist Andrew McCartney.

“Policies must recognise the importance of women entrepreneurship and create an enabling environment that increases women’s participation in the formal economy and gives them more opportunities to grow their businesses.”

The policy-based loan supports reforms that incorporate women’s needs into national policies, such as the State Bank of Pakistan’s Banking on Equality Policy that, among a range of measures, requires banks to establish departments dedicated to providing services to women.

It supports measures enabling women’s access to credit and credit alternatives through digital channels, providing financial training and advisory services to women, and improving the working conditions of women within the finance sector.

The financial intermediation loan, meanwhile, is expected to benefit around two million women entrepreneurs, including about 510,000 who previously had no access to finance, through lending via participating financial institutions.

The grant from the Asian Development Fund (ADF) will finance activities such as the development of financial literacy programs and a digital platform that links women to financial services.

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IMF board to meet on Jan 11 for Pakistan’s first review approval




  • Pakistan’s case not included in board meeting agenda for Dec 1-15. 
  • Ongoing SBA programme is going to expire on April 14, 2024.
  • Pakistan, IMF reached agreement on first review last month.

The International Monetary Fund’s Executive Board will take up Pakistan’s first review on January 11 next year for approval that will unlock $700 million under the standby arrangement (SBA), Bloomberg quoted the lender’s spokesperson as saying on Friday.

Last month, Pakistan reached a staff-level agreement with the IMF under the $3 billion SBA and is awaiting the board’s approval to receive a second tranche.

Earlier this week, The News had reported that Pakistan’s first review for approval was not included in the IMF’s Executive Board meeting agenda for the 1-15 December schedule

The publication reported that the IMF did not firm up its exact schedule because the Fund’s team was busy securing re-confirmation from all multilateral and bilateral creditors to meet the financing requirements of $24.9 billion for the current fiscal year.

This delay surfaced in discussions among the policymakers that the IMF might kick-start parleys on the second review probably after the general elections and takeover by the elected government.

The IMF programme was initially scheduled to kick-start parleys for a second review from Feb 3, 2024, but if the elections were scheduled to be held on February 8, 2024, then the possibility of holding talks might be done in the last week of Feb or early March 2024.

The ongoing SBA programme is going to expire on April 14, 2024.

A day earlier, IMF Executive Director Bahador Bijani noted an overall improvement in the economic situation, saying, the “Pakistani authorities have delivered”.

He made these remarks at an event hosted by Pakistan’s ambassador to the US in honour of friends of Pakistan from International Financial Institutions including IMF, International Finance Corporation (IFC), World Bank (WB), and Multilateral Investment Guarantee Agency (MIGA), at Pakistan House in Washington.

“I think the future for Pakistan is very bright. Pakistan is not just any country. It’s one of the most important countries in the region and in the world. Pakistanis deserve much more,” the IMF executive director was quoted as saying in an official statement.

Nathan Porter, IMF Mission Chief to Pakistan, also expressed satisfaction over the recently concluded staff-level agreement. He said that the actions and policies of the current government reflected its commitment to steer the country towards stabilisation.

Pakistan is reeling from Asia’s fastest inflation, has about $1 billion in dollar-denominated debt due next year and is scheduled to hold elections scheduled in February.

Interim Finance Minister Shamshad Akhtar said after the staff-level deal in November that the country may seek an additional loan from the IMF, describing the economy as “still fragile.”

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PSX hits new milestone as KSE-100 surges past 66,000 mark




KARACHI: Bulls maintained their grip on the Pakistan Stock Exchange (PSX) as the benchmark index shot past the 66,000 mark on Friday by gaining over 1,000 points. 

According to the PSX website, the KSE-100 index gained 1,302.45 points or 2.01% to reach 66,020.52 points at 11:39am during the intraday trading.

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Raza Jafri, who is the head of equities at Karachi-based Intermarket Securities, said that the banks and energy sector lead the rally at the bourse as cheap valuations and a reasonably settled environment help flows remain strong as foreign and local buys continue to invest.

“The MPC (Monetary Policy Meeting) next week should set the tone for near-term trading. While unchanged interest rates are widely expected, investors will look for clues in the text of the monetary policy statement to gauge how much interest rates can come down by next year,” he added. 

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