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Rupee snaps multisession losing streak

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  • Rupee mostly remains stable in Friday’s trade
  • Hopes of dollar inflows underpin buoyant close.
  • Dollar continues to outshine world currencies.

KARACHI: The rupee Friday closed the session a shade higher versus the US dollar, snapping the multi-day losing streak, mostly on bets of financial assistance from friendly countries and multilateral lenders, dealers said.

According to the State Bank of Pakistan (SBP), the rupee closed at 221.92 after an appreciation of Re0.03 or 0.01% in the interbank market compared to its Thursday’s closing of 221.95 against the dollar. 

The local unit ended at 221.95 per dollar after losing Re0.52 or 0.23% on Wednesday.

Moreover, the dollar has been gaining against major currencies after Federal Reserve Chair Jerome Powell signalled US interest rates will likely peak at a higher level than markets expected. 

On the other hand, the pound sterling sank after the Bank of England raised rates but warned of a “very challenging outlook.”

Analysts said the SBP’s allowing the exchange companies to trade 20% of remittances in the open market will ease pressure on the rupee.

The SBP on Thursday allowed exchange companies to trade 20% of remittances in the open market to ease pressure on the rupee.

Federal Minister for Finance Ishaq Dar earlier this week announced clearance of Letters of Credit (LCs) up to $50,000, which spiked the dollar demand from importers.

Last week, the exchange businesses requested Dar to allow at least half of the remittances to be used by the open market. They expected that the possibility of receiving half of the remittances would lessen the demand for the dollar and lower its rate in the currency market.

“On our request, the governor State Bank of Pakistan has enabled the exchange companies to sell 20% of workers’ remittances to the general public,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP) said in a statement.

Bostan, along with other members of ECAP held a meeting with governor SBP Jameel Ahmad and thanked him for helping exchange companies whenever they face any problem. 

“Due to the low rate of exchange companies, customers are selling in the black market instead of selling to exchange companies as their rate is 10 to 15 rupees more per dollar than exchange companies,” he said.

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Finance Minister: A “big” IMF program is coming for Pakistan.

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Speaking at the Karachi Stock Exchange ceremony, the Finance Minister announced that meetings with IMF representatives would take place in Washington on April 14 and 15.

He applauded the caretaker government’s effort to bring about economic stability and predicted that the nation’s economy would stabilize with improved economic policies.

Muhammad Aurangzeb emphasized that in order to move the country’s economy toward stabilization, structural reforms must be implemented.

He restated that the nation’s recovery from the economic crisis depends heavily on the stock market. The stock market is, nevertheless, trending upward.

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Pakistan is still classified as a secondary emerging market by the FTSE.

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The nation could perhaps be demoted, according to the worldwide index provider, since its index weight has decreased over the previous few years.

Pakistan’s market capitalization peaked in 2017 at $100 billion, but it fell to $21 billion by 2024, according to a Bloomberg research.

It did, however, state that Pakistan’s standing as a secondary emerging market will remain unchanged due to favorable political changes brought about by the establishment of a stable government.

Bloomberg saw Shehbaz Sharif’s election as prime minister, who is open to reform, as a step in the right direction for the nation struggling financially.

Shehbaz Sharif, the president of the Pakistan Muslim League-Nawaz, was chosen on March 4 to serve as the country’s 24th prime minister.

With 201 votes, PM Shehbaz defeated Omar Ayub Khan of the Sunni Ittehad Council (SIC) by 92 votes.

over the economy, earlier this month, Pakistan and the International Monetary Fund (IMF) came to an agreement at the staff level over the second and last review conducted under Pakistan’s Stand-By Arrangement.

The IMF secured a staff-level agreement with Pakistan on the second and final review of the nation’s stabilization program, which is backed by the IMF’s US$3 billion (SDR2,250 million) SBA authorized, according to the official statement released by an IMF team led by Nathan Porter.

The remaining US$1.1 billion (SDR 828 million) of SBA access will be made available following the IMF Executive Board’s approval of the deal.

It was reported shortly after the February 8 election that the newly elected PML-N-led government intended to apply for a new IMF credit package.

Pakistan is anticipated to pursue a $6–8 billion loan program from the global lender, and the IMF will be contacted right once to begin negotiations for this. The sources went on to say that the IMF would have tighter requirements this time.

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PM Shehbaz Sharif: “A plan to digitize the tax system is underway.”

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In an address to the All Pakistan Newspapers Society delegation in Islamabad today, the prime minister announced that plans were in motion to update the tax collection system.

The prime minister added that efforts are underway to broaden the revenue base and that the Federal Board of Revenue (FBR) is fully digitizing.

He emphasized that the Tax Excellence Awards were a recent initiative by the government to support female entrepreneurs, exporters, and engaged taxpayers.

The government’s priorities, according to the prime minister, are institutional changes, austerity, domestic and external investment, and privatization of government-owned businesses.

Praiseing the media’s contribution to public awareness-raising and good governance, he called on the sector to successfully communicate the benefits of economic stability under SIFC.

Calling fake news a major problem, he emphasized the need for cooperation to combat it. Additionally, he extended an invitation to the press to back Pakistan’s administration in its endeavors for the country’s growth and well-being.

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