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Rupee puts major dent in dollar on renewed bailout bets

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1 year ago

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  • Rupee gains as investors hope inflows to bolster dollar reserves.
  • Analysts see rupee resilient if funding ensured down the line.
  • Saudi confirmation for inflows strengthens IMF bailout hopes. 

Rupee on Thursday turned tables on the US dollar, strengthening by over a percent in inter-bank trade, as hopes for the revival of the International Monetary Fund (IMF) bailout flared up after Saudi Arabia confirmed to the multilateral lender of its financial assistance to Pakistan.

The local unit, in the interbank market, closed at 284.42 against the US dollar, up 1.2% or Rs3.43 from Wednesday’s close of 287.85, according to the State Bank of Pakistan (SBP). 

Analysts termed this recovery, which came a day after the rupee hit a new record low of 287.85 in the inter-bank market after a decline of Re.56 or 0.19%, as a positive development and see local currency resilient in days to come if inflows ensured.

The IMF has conveyed to Pakistan that it has received confirmation from Saudi Arabia on $2 billion in additional deposits, rekindling hopes of an early signing of the agreement.

Islamabad has been negotiating with the IMF since the end of January for the release of $1.1 billion from a $6.5 billion bailout package agreed upon in 2019. To unlock the funding, the government has cut back on subsidies, removed an artificial cap on the exchange rate, added taxes and raised fuel prices.

However, assurances from friendly nations for additional funds have delayed the agreement.

Sources confirmed to The News that the lender had informed the Pakistani authorities about the development and the Fund staff seemed largely satisfied with the latest confirmation. 

“Now all eyes are focused on the UAE for getting confirmation on another $1 billion deposit from them, which may pave the way for striking the staff-level agreement (SLA) with the IMF,” the sources said.

Finance Minister Ishaq Dar is likely to visit UAE on his way to the US where he is expected to hold talks on the release of funds.

Worldwide, the US dollar gained slightly on Thursday but hasn’t strayed too far from a recent two-month low as traders weighed how pivotal US jobs data coming out during a holiday weekend will impact Federal Reserve policy.

The list of soft economic data has added to fears of an impending recession in the world’s largest economy, putting a lid on risk appetite and sending traders in search of some safe-haven assets.

It should be noted that the foreign exchange reserves held by the SBP stand at a critical level of $4.2 billion — barely enough to cover one month’s imports.

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The inaugural flight of Azerbaijan Airlines is between Baku and Karachi.

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9 hours ago

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The national airline of Azerbaijan launched direct flights from Baku to Karachi today. There will be two weekly flights on this route, on Thursdays and Sundays.

The first flight will land in Karachi, and Azerbaijan’s ambassador, Khazar Farhadov, will be there to greet it.

This evening also marks the departure of the inaugural flight from Karachi to Baku, in addition to the arrival of the flight from Baku.

Azerbaijan Airlines said last month that it would be growing its network and flight operations in Pakistan.

Aviation insiders have verified that Azerbaijan Airlines is preparing to launch service to Karachi in the coming month of April.

In addition to its current services in Islamabad and Lahore, the airline plans to launch its Karachi route on April 18, with the inaugural flight anticipated to depart on that date.

Azerbaijan Airlines has been given permission to operate flights on the Karachi route, according to sources within the Civil Aviation Authority (CAA).

Following a bilateral agreement between the two nations, Azerbaijan Airlines has been given permission to extend its operations in Pakistan.

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Fly Jinnah opens a new route internationally.

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9 hours ago

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Two weekly flights will be the starting frequency of the new route, which will connect the two cities.

According to a representative for Fly Jinnah, the company is pleased to announce the opening of a third international route from Islamabad to Muscat, the capital city of Oman, marking another significant milestone after the successful debut of flights from Islamabad and Lahore to Sharjah.

According to him, this development is in line with our goal of giving our clients more options for reasonably priced, value-driven local and international air travel.

The airline serves five main cities in Pakistan: Karachi, Lahore, Islamabad, Peshawar, and Quetta. Its fleet consists of five Airbus A320 aircraft, all of which are contemporary.

In addition to the current flight path to Sharjah, United Arab Emirates, this new route expands Fly Jinnah’s network of foreign destinations.

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Tajir Dost app: traders don’t seem interested in registering

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10 hours ago

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To tax retailers in Pakistan, the Tajir Dost app was released. The sources stated that the government hopes to tax 3.5 million merchants through the app.

Ajmal Baloch, the president of All-Pakistan Anjuman-e-Tajran, stated that he made reservations with FBR on the SRO within a week.

The Federal Board of Revenue (FBR), according to him, cannot be a “Tajir Dost” because of its unethical actions.

Baloch believed that since electricity bills allow traders to pay a predetermined advance income tax, further taxes are unnecessary.

The trader, according to him, is already paying thirteen different kinds of taxes on the commercial meter. “A trader already pays between Rs. 15,000 and Rs. 20,000 in taxes annually, but you are requesting Rs. 1,200 per month in taxes.”

Mr. Ajmal summoned representatives of the Federal Board of Revenue (FBR) to a meeting with the trade associations to talk about the indirect taxes that the merchants are paying.

Additionally, he claimed that FBR officers are charging the traders, the majority of whom are less educated, “monthly charges.”

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