The Pakistani Rupee's alarming decline during the PDM regime's tenure

[MenInG]

Defying market expectations of currency stability following receipt of $3 billion in aid from Saudi Arabia, the rupee continued to lose ground against foreign currencies as it hit a new all-time low of Rs177.43 against the US dollar in the inter-bank market on Wednesday.

The rupee had closed at Rs176.79 on Tuesday, showing day-on-day drop of 0.36% (or Rs0.64) on Wednesday, according to the State Bank of Pakistan (SBP).

The receipt of $3 billion from Saudi Arabia on Saturday last week for depositing in the State Bank had been expected to support the rupee’s recovery and stabilise it at around 175.

In the open market, the local currency dropped to Rs179 per dollar, according to the Exchange Companies Association of Pakistan (ECAP).

Pakistan’s current account deficit is expected to widen by $2 billion to $2.5 billion in November in the wake of a surprising spike in the import bill to a record high at $8 billion.

“The anticipated current account number is unsustainable. This is taking a toll on the rupee,” Arif Habib Limited (AHL) Head of Research Tahir Abbas said while talking to The Express Tribune.

ECAP President Malik Bostan was of the view that financial crisis in neighbouring Afghanistan was accelerating the drop in rupee’s value against the dollar.

Prices of commodities in Afghanistan are significantly higher compared to Pakistan. Similarly, one US dollar in the neighbouring country is available for 10 rupees more than in Pakistan.

“This situation has encouraged the smuggling of goods and currency along the Pakistan-Afghanistan border,” he said and noted that the smuggling of goods to the neighbouring country was leading to a spike in Pakistan’s import bill.

Pakistani currency has depreciated 16.52% (or Rs25.16) in the past six months compared to the 22-month high of Rs152.27 recorded in May 2021.

Since the start of current fiscal year on July 1, 2021, the rupee has dropped 12.62% (or Rs19.89) compared to the opening level of Rs157.54.

Bostan revealed that the price of wheat flour in Afghanistan was more than double than in Pakistan, which encouraged smugglers to send flour shipments to Kabul, resulting in an increase in imports of food items into Pakistan.

The Taliban government in Afghanistan is in dire need of dollars to run the country. However, the US has denied access to Kabul’s foreign currency reserves of around $10 billion which are parked in US banks.

He said that the inflow of workers’ remittances dropped to $2.5 billion in October 2021 compared to around $2.7 billion in prior months.

“The drop in remittances came as Hawala/Hundi operators were operating in border areas,” he said. The drop in workers’ remittances also aided the depreciation of the rupee, he said.

Bostan said that foreign exchange companies were providing $300-400 per month to the inter-bank market due to excess supply on their end however, this amount dropped to around $200 million in the ongoing month. He pointed out that hawala-hundi operators were offering a better price therefore there was a drop in inflow of remittances through the official channels.

He said that the Exchange Companies Association of Pakistan had explained the situation to high ranking officials of the country including Finance Adviser Shaukat Tarin, Commerce Adviser Razak Dawood and State Bank of Pakistan Governor Reza Baqir. According to him, they promised to check the smuggling and take appropriate actions against it.

Abbas said the recent drop in international oil price would help taper off Pakistan’s import bill. Besides, the forthcoming mini-budget is expected to introduce measures to cut the import bill through he imposition of regulatory duty and increase in customs duty.

The mini-budget is expected to be unveiled sometime in the ongoing month of December and the measures, included in it, would support the stabilisation of rupee.

According to him, there was available no room for lofty depreciation in rupee. The domestic currency should stabilise at around Rs175-176, he said.

Published in The Express Tribune, December 9th, 2021.

[Saj]

Depressing news for the Pakistani economy!

[realitygaf]

IK Government getting Reward for supporting Taliban government

[Cover Drive Six]

1 usd = 75.7 inr
1 usd = 177.5 pkr

[Mamoon]

Imran Khan has destroyed Pakistan’s economy and made PKR absolutely worthless.

[hoshiarpurexpress]

Good time to be an overseas Pakistani. Your Pounds/Dollars can buy more stuff in Pakistan and you can invest in some fancy real estate.

[Sher Khan]

Does anyone know how much an average house costs in Pakistan? Also, is it profitable in the current climate to buy/sell houses?

[James]

Business Recorder — Against USD: Pakistan’s rupee weakens to record level.

Closes at 177.71 in the inter-bank market on Friday.

Pakistan's rupee continued to decline further against the US dollar, depreciating 0.06% in the inter-bank market to record yet another historic low on Friday.

As per the State Bank of Pakistan (SBP), the PKR closed at 177.71 against the USD after a day-on-day depreciation of 10 paisas or 0.06%. On Thursday, PKR closed at the then-record low of 177.61 against the USD.

The rupee has depreciated by 11.18% CYTD and 12.8% on FYTD basis against US dollar.

“The entire market has set their sights on the upcoming Monetary Policy Committee (MPC) meeting of the central bank,” Saad Hashmey, Executive Director BMA Capital told Business Recorder.

The analyst said that the market anticipates a policy rate hike to the tune of 100-200 bps in the upcoming MPC.

“If the rate hike is of 100 bps, the market has already incorporated the impact. However, a rate hike of over 100 bps would have a negative impact on the market,” Hashmey said.

The SBP's MPC is scheduled to meet on December 14 and comes only 24 days after the previous meeting. Last month, SBP hiked the interest rate by 150 basis points, taking it to 8.75% as it announced the monetary policy.

Hashmey further said that the dollar would stabilize when the government implement measures to curb imports. “The government needs to tighten its screws to resolve energy sector issues, curb imports and increase the tax revenue,” Hashmey said.

“PKR will reflect the pace of policy measures implemented by the government,” he added.

The analyst said that the International Monetary Fund (IMF) also needs to get on board, saying that this would act as a “seal of approval from other international lenders including World Bank and Asian Development Bank” to meet external funding gap.

Meanwhile, Pakistan’s foreign exchange reserves witnessed significant gains last week amid multi-billion-dollar deposits received from Saudi Arabia.

As per SBP's weekly report issued on Friday, total liquid foreign exchange reserves held by the country stood at $25.150 billion on December 03, 2021. During the week under review, the SBP’s reserves increased by $2,647.9 million to $ 18.66 billion.

In the open market, PKR gained 10 paisas for buying and 40 paisas for selling against USD, closing at 178.90 and 179.90, respectively.

Against Euro, PKR gained 70 paisas for buying and 80 paisas for selling, closing at 199.80 and 201.70, respectively.

Against UAE Dirham, PKR lost 19 paisas for buying while remaining unchanged for selling, closing at 49.60 and 49.90, respectively.

Against Saudi Riyal, PKR lost 15 paisas for buying while remaining unchanged for selling, closing at 47.25 and 47.55, respectively.

[Noman]

Feeling sad about this. We have to somehow stop the rs falling Any more

[Mamoon]

Good time to be an overseas Pakistani. Your Pounds/Dollars can buy more stuff in Pakistan and you can invest in some fancy real estate.

This is why they worship Imran. The more Imran destroys Pakistan’s economy, the more they benefit.

[Local.Dada]

This is why they worship Imran. The more Imran destroys Pakistan’s economy, the more they benefit.

Without getting into the whole Imran competency debate I am not sure of how much rupee devaluation actually helps the overseas community.

It’s not that every overseas expat has ready liquid cash or great credit to start investing crazily just because the exchange rate is down. Not sure if this impacts the already affluent ones that much who own property in their home country.

If you are living in a foreign country there are the living expenses,responsibilities and bills. There are multiple investment opportunities available so not sure if the rupee value depreciation will all of a sudden be seen as an investment opportunity to start buying assets and real estate in Pakistan.

Also without getting into metrics and economics, simple question for argument sake if a person monthly $100 to his family in Pakistan at 1000 pkr value which covers for the cost of essentials, now if 100 usd becomes 2000 pkr and the cost of goods increase how does that leave surplus for anyone?

I understand politicians have to come up with rhetoric to appease the public so will overlook the excuses but it is still a dumb excuse to be honest.

On top of that unless you are a patriotic British Pakistani like some of our bros here, why would anyone with hard earned money see an investment opportunity in the real estate or financial instruments in Pakistan under the current delicate circumstances geo-politically and financially.

[Saj]

Does anyone know how much an average house costs in Pakistan? Also, is it profitable in the current climate to buy/sell houses?

For overseas Pakistanis it's probably a good time.

It all depends I guess on where you are investing and the type of property you are purchasing.

[pakistanisgreat]

Without getting into the whole Imran competency debate I am not sure of how much rupee devaluation actually helps the overseas community.

It’s not that every overseas expat has ready liquid cash or great credit to start investing crazily just because the exchange rate is down. Not sure if this impacts the already affluent ones that much who own property in their home country.

If you are living in a foreign country there are the living expenses,responsibilities and bills. There are multiple investment opportunities available so not sure if the rupee value depreciation will all of a sudden be seen as an investment opportunity to start buying assets and real estate in Pakistan.

Also without getting into metrics and economics, simple question for argument sake if a person monthly $100 to his family in Pakistan at 1000 pkr value which covers for the cost of essentials, now if 100 usd becomes 2000 pkr and the cost of goods increase how does that leave surplus for anyone?

I understand politicians have to come up with rhetoric to appease the public so will overlook the excuses but it is still a dumb excuse to be honest.

On top of that unless you are a patriotic British Pakistani like some of our bros here, why would anyone with hard earned money see an investment opportunity in the real estate or financial instruments in Pakistan under the current delicate circumstances geo-politically and financially.

It helped me save $3000 to $4000.

There was a land i was trying to acquire last year. However, i was keep bargaining and drag until i know i would save good amount of money. Therefore, i purchased few months ago.

[Napa]

KARACHI: Pakistani currency hit a new all-time low of Rs169.60 against the US dollar in the inter-bank market on Monday in the wake of mounting pressure of import payments on the back of a surge in commodity prices in global markets and the tumultuous geopolitical situation in Afghanistan.

Scheduled talks between the International Monetary Fund (IMF) and Pakistan to resume $6 billion loan programme are not seen as a strong reason behind the downward trend in the rupee, but the expected successful conclusion of the discussion is projected to end volatility in the currency.

Since the rupee has achieved equilibrium against the US dollar a few days ago, the recent drop in its value is unsustainable and short-lived.

“Panic buying of dollar has caused the rupee’s slide,” Ismail Iqbal Securities Head of Research Fahad Rauf said while talking to The Express Tribune.

“The rupee volatility will end with successful conclusion of talks between Pakistan and the IMF in October,” said Arif Habib Limited Head of Research Tahir Abbas.

https://tribune.com.pk/story/2322234...h-low-of-16960

Sep 28, 2021

It is rather surprising how professionals make such statements which shows a lack of understanding of economic fundamentals.

I had posted the following to another thread on Sep 28th, that is about 2.5 months ago.

As Pakistan keeps running current account deficits and exports don't increase due to the lack of development of modern industries, it is inevitable that the currency will keep depreciating over the long-term.

PKR has gone from 125 3 years ago to 170 now. Expect it to fall to 185 in a year and over 200 in a couple of years. IMF is not inclined to keep lending money to a country that keeps running a CAD, and the PKR will have to keep depreciating to curb imports.

It shouldn't be hard to understand. The development of modern industries has gone backwards under IK, who has firmly positioned Pakistan to be in China/Taliban's camp. Without modern industries, Pakistan is stuck exporting textiles and dependent on inadequate remittances to pay for imports.

When I posted on Sep 28, the PKR was at 169.60. Today it is at 176.96. My prediction was "Expect it to fall to 185 in a year and over 200 in a couple of years."

[realitygaf]

Even if you hate Nawaz sharif you have to admit he poured a lot more into pakistan infrastructure than Imran khan ever has

[Local.Dada]

It helped me save $3000 to $4000.

There was a land i was trying to acquire last year. However, i was keep bargaining and drag until i know i would save good amount of money. Therefore, i purchased few months ago.

That’s because you had dispensable income to spend in the first place.

It doesn’t help the local.

You might have saved 3000-4000 but you probably also outbid the local who was willing to pay in the local currency but was left behind because of inflation/ devaluation. I am not saying that happened in this specific instance in your example but that’s what happens when local currency is devalued.

Also now all of a sudden overseas folk with money start spending money because local currency is cheap, it will only increase the cost for the locals.

[Gharib Aadmi]

On top of that unless you are a patriotic British Pakistani like some of our bros here, why would anyone with hard earned money see an investment opportunity in the real estate or financial instruments in Pakistan under the current delicate circumstances geo-politically and financially.

In Pakistan people dont buy stocks, they buy land as an investment, and as the price of land goes up faster than inflation its usually a good idea.

Why would an overseas Pakistani buy land? Well they might want to move back to Pakistan one day. If they are in the gulf, then they have no choice as they dont get citizenship in those countries. And for those in the west, alot of them like to have a property in both places.

[Gharib Aadmi]

Does anyone know how much an average house costs in Pakistan? Also, is it profitable in the current climate to buy/sell houses?

depends on the city, the area in that city, and the size of property you want. You can try zameen . com to get a decent idea of what houses and land will cost.

[Gharib Aadmi]

The rupee has been going down for the last 70 years, this is not something new in IK term. However the reason it has went down so much in IK term is because Nawaz Sharif had artificially inflated it. One can check the REER rate, it was well over a 100 every year in Nawaz's term which signals that the currency was overvalued.

https://data.worldbank.org/indicator...980&view=chart

IK made the right decision in letting the rupee devalue, and let the market determine its price. Right now the price of the rupee is its actual value, maybe even slightly undervalued.

Ultimately the market should decide the price of the rupee. If it goes to 200 it goes to 200.

[Local.Dada]

In
Why would an overseas Pakistani buy land?

I was only responding to the example the poster gave. All I was asking is while yes the spread between dollar and pkr might help overseas Pakistanis with dispensable income to invest but that’s an individual benefit. How is this a positive economic indicator?

If the locals are getting more pkr from remittances from their relatives, they are also spending that on essentials which have also gone up in price due to inflation.

I don’t think this is rocket science. Also if an overseas pakistani invests 100 pkr for example and in a financial instrument gets 25% interest, after a year 125 PKR will have the same value as the $ rate from what he invested, how is that a benefit?

I am not sure what your argument is. You think this is a good thing or what? Please explain

[Savak]

The rupee has been going down for the last 70 years, this is not something new in IK term. However the reason it has went down so much in IK term is because Nawaz Sharif had artificially inflated it. One can check the REER rate, it was well over a 100 every year in Nawaz's term which signals that the currency was overvalued.

https://data.worldbank.org/indicator...980&view=chart

IK made the right decision in letting the rupee devalue, and let the market determine its price. Right now the price of the rupee is its actual value, maybe even slightly undervalued.

Ultimately the market should decide the price of the rupee. If it goes to 200 it goes to 200.

The opposition, their buy outs, lifafas in their pocket and some locals who don't have the stomach to make sacrifices to make sacrifices and are easily hoodwinked by the opposition which has contributed to our bankruptcy today have been raising their voices daily non stop but the gov't has not been aggressively responding back to these critics

[Savak]

Even if you hate Nawaz sharif you have to admit he poured a lot more into pakistan infrastructure than Imran khan ever has

He did because he viewed the nations khazana as baap ka maal and he was in power in better circumstances. And those projects were not intended purely as a benefit for the nation but to shore up his pockets, according to Raymond Bakers book, he pocketed a kickback of $147 million alone just from the Lahore Islamabad motorway.

If you take the position that you would rather be ruled by the corrupt but Competent then you fully deserve to deal with the consequences of the PPP and PML N rule ie the austerity measures the pti govt has had to adopt

[Gharib Aadmi]

I was only responding to the example the poster gave. All I was asking is while yes the spread between dollar and pkr might help overseas Pakistanis with dispensable income to invest but that’s an individual benefit. How is this a positive economic indicator?

It is an individual benefit, and its definitely bad for the country My response was on why people in Pakistan prefer to buy land as investment. Thats just Pakistnai culture, to buy land/house as an investment.

I don’t think this is rocket science. Also if an overseas pakistani invests 100 pkr for example and in a financial instrument gets 25% interest, after a year 125 PKR will have the same value as the $ rate from what he invested, how is that a benefit?

I am not sure what your argument is. You think this is a good thing or what? Please explain

Using your numbers, that's still a better rate of return if they invested in anything else. What other investment can someone in Pakistan make besides from land?

Majority of overseas Pakistanis are middle class/lower middle class people who live in the Gulf Arab countries. Not in the west. These people have to go back to Pakistan as they wont get citizenship in the Gulf.

And yes the fall is good for them and their families. They might be able to afford buying a house in a better area than the one they came from.

Its bad for the people living in Pakistan who are not getting remittances.

However the bulk of the people online you see online who live in Pakistan are from the upper middle class/elite class. They are complaining because the subsidized lifestyle that enjoyed with an overvalued rupee is eroding.

[pakistanisgreat]

He did because he viewed the nations khazana as baap ka maal and he was in power in better circumstances. And those projects were not intended purely as a benefit for the nation but to shore up his pockets, according to Raymond Bakers book, he pocketed a kickback of $147 million alone just from the Lahore Islamabad motorway.

If you take the position that you would rather be ruled by the corrupt but Competent then you fully deserve to deal with the consequences of the PPP and PML N rule ie the austerity measures the pti govt has had to adopt

PPP and PMNL are corrupt. Then How Hafeez shikh former finance minister and current finance minister Shukat tareen are honest?
The biggest thief of punjab is Parveen Ilahi. What makes him honest now?

[pakistanisgreat]

That’s because you had dispensable income to spend in the first place.

It doesn’t help the local.

You might have saved 3000-4000 but you probably also outbid the local who was willing to pay in the local currency but was left behind because of inflation/ devaluation. I am not saying that happened in this specific instance in your example but that’s what happens when local currency is devalued.

Also now all of a sudden overseas folk with money start spending money because local currency is cheap, it will only increase the cost for the locals.

not disagreeing with you that locals are left behind.
That was just answer to your question how this will benefit overseas Pakistani.
The devaluation in currency really hurting local in Pakistan.
People used to go to perform Hajj for almost 3 to 4 hundreds thousands 2 years ago. Now the rate is close to 7 to 8 eight hundreds thousands.

[Gharib Aadmi]

not disagreeing with you that locals are left behind.
That was just answer to your question how this will benefit overseas Pakistani.
The devaluation in currency really hurting local in Pakistan.
People used to go to perform Hajj for almost 3 to 4 hundreds thousands 2 years ago. Now the rate is close to 7 to 8 eight hundreds thousands.

A part of the increase is also because the govt used to give a subsidy for Hajj.

[MenInG]

As per the State Bank of Pakistan (SBP), the PKR closed at 178.04 against the USD after a day-on-day depreciation of 6 paisas or 0.03%. This is the weakest closing for the rupee against the US dollar in the inter-bank market.

On Thursday, the PKR had closed at the then-record low of 177.98 against the USD.

Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.

“The key cause behind pressure on the rupee has been a widening of the current account,” said SBP Governor Dr Reza Baqir earlier on Friday.

“Some part of the current account weakening is not in our control, such as the global commodity prices but with a number of central banks around the world now beginning to tighten, we are hoping that there will be some easing on global commodity prices,” added the central bank chief.

Pakistan’s trade deficit widened by 111.74% to $20.590 billion during the first five months (July-November) of the current fiscal year 2021-22 as compared to $9.724 billion during the same period of 2020-21.

3rd successive hike: SBP increases key interest rate by 100 basis points, takes it to 9.75%

Inflation rate has already hit 11.5%, prompting the central bank to raise interest rates by another 100 basis points, taking it to 9.75%.

Meanwhile, the SBP invited quotes for Open Market Operations (OMO) in two tenors i.e. i) 07-Day maturity (24-Dec-21) and ii) 63-day maturity (18-Feb-22), informed Ismail Iqbal Securities.

“This would signal the market that the SBP is willing to accept the fixed cost for 2 months, which means policy rates would remain unchanged in the near term,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities.

“This action has likely come in reaction to higher yields in the recent T-bill auction, which the SBP termed as unwarranted in its recent policy statement,” said Rauf.

Results indicated a rate of 9.82% for a seven-day injection, while 9.90% for a 63-day injection.

Meanwhile, Pakistan’s foreign exchange reserves also fell by $89.9 million to $18,568 million.

“The drop confirms payment exceeds receivables,” Asad Rizvi, Ex-Treasury Head of Chase Manhattan, tweeted.

He said that “this is not a very encouraging sign as demand for USD is pushing PKR close to all-time lows,” adding that funding from the International Monetary Fund (IMF) will not be available till January, as demand for USD persists.

https://www.brecorder.com/news/40140...h-historic-low

[MenInG]

Pakistan's rupee lost ground yet again on Wednesday, closing down another 10 paisas in the inter-bank market to end at its weakest level in history.

As per the State Bank of Pakistan (SBP), the PKR closed at 178.15 against the USD after a day-on-day depreciation of 10 paisa or 0.06%. This is the weakest closing for the rupee against the US dollar in the inter-bank market.

On Tuesday, the PKR closed at 178.05 against the USD.

Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.

The decline comes after Pakistan's current account deficit widened slightly to $1.91 billion in November 2021, from $1.76 billion in October 2021, showed data released on Monday, as imports outstripped strong exports and remittances.

However, the import number of $6.4 billion is $1.5 billion lower than the Pakistan Bureau of Statistics (PBS) figure of $7.9 billion, which is probably the biggest gap seen in any month between SBP and PBS numbers.

“The CAD of $1.9 billion in November remains on a higher side on a month-on-month basis,” Tahir Abbas, Head of Research at Arif Habib Limited (AHL), told Business Recorder.

Abbas added that the difference in import figures data between the SBP and PBS will be incorporated in the coming months.

"The PBS tracks shipping data, whereas SBP tracks payments data, which is the main difference.

“However, there is a large difference in data of the two entities regarding oil imports,” said Abbas, who was of the view that there could be an error at the PBS end.

July-Nov: C/A deficit yawns to $7.1bn

Meanwhile, Fahad Rauf, Head of Research at Ismail Iqbal Securities, said that the exchange rate is under pressure due to the current account deficit.

“Pressure will continue to remain in the coming months, as commodity prices have not come down yet. If CAD remains in $1.5-2 billion range in coming months, pressure would remain on the exchange rate,” Rauf told Business Recorder.

He said that the data gap has also caused confusion in the market. “Furthermore, delay of mini-budget has raised concerns among market participants regarding the IMF programme,” he said, while adding that positive triggers are not in sight until the IMF funds are received.

Inter-bank market rates for dollar on Wednesday

BID Rs 178.10

OFFER Rs 178.20

Open-market movement

In the open market, PKR gained 10 paisas for both buying and selling against USD, closing at 178.90 and 179.90, respectively.

Against Euro, the PKR lost 1 rupee for buying and 50 paisas for selling, closing at 200 and 201.50, respectively.

Against UAE Dirham, the PKR lost 30 paisas for both buying and selling, closing at 50.20 and 50.60, respectively.

Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 47 and 47.40, respectively.

Open-market rates for dollar on Wednesday

BID Rs 178.90

OFFER Rs 179.90

https://www.brecorder.com/news/40141...er-bank-market

[MenInG]

[Hassaan HS]

Against USD: Pakistan's rupee fights back with significant recovery

After days of decline, Pakistan's rupee hit back with a significant gain against the US dollar, appreciating 0.41% in the inter-bank market on Thursday.

As per the State Bank of Pakistan (SBP), the PKR closed at 177.51 against the USD after a day-on-day appreciation of 73 paisas or 0.41%. Just a day ago, the PKR had closed at its all-time record low of 178.24 against the USD.“This is the highest recovery after 31 sessions,” said Arif Habib Limited (AHL) in a research note.

Cumulatively, the rupee has depreciated nearly 10% CYTD, 11.25% FYTD, and 14.22% since its CY21’s high achieved on May 14 against the US dollar.

The currency has been under pressure due to a bulging import bill that has been worsened due to higher commodity prices in the international market.“As we approach the year-end, there is nothing much to talk about the rupee, as the corporate sector has squared their books,” Asad Rizvi, Ex-Treasury Head at Chase Manhattan, tweeted. Rizvi added that it is the year-end payments that make rupee vulnerable. “However, to manage cash flows, Rs/$ short-dated swaps will remain active in the inter-bank market,” he said.

Internationally, dollar rose against major rival currencies in holiday-thinned trading on Thursday.

The dollar index, which measures the greenback against major peers, rose 0.39% to 96.19 after the S&P 500 and the Dow Jones Industrial Average stock indexes closed at all-time highs on Wednesday, the latter rising for a sixth session.

Inter-bank market rates for dollar on Thursday

BID Rs 177.25

OFFER Rs 177.35

Open-market movement

In the open market, the PKR gained 80 paisas for both buying and selling against USD, closing at 179 and 179.50, respectively.

Against Euro, the PKR gained 50 paisas for buying while remaining unchanged for selling, closing at 200 and 202, respectively.

Against UAE Dirham, the PKR gained 40 paisas for buying and 30 paisas for selling, closing at 50.30 and 50.80, respectively.

Against Saudi Riyal, the PKR gained 40 paisas for both buying and selling, closing at 46.60 and 47, respectively.

Open-market rates for dollar on Thursday

BID Rs 179

OFFER Rs 179.50

https://www.brecorder.com/news/40143...icant-recovery

[MenInG]

The rupee ended 0.41% against the dollar on Thursday, as a suspected central bank intervention aided the local currency's recovery from the previous session's record low, while the cabinet's approval of a supplementary budget to secure funding from the International Monetary Fund (IMF) also helped boost sentiment.

Since Wednesday's interbank close of 178.24, the rupee has recovered to 177.51 against the dollar today.

[transparent opacity]

Against USD: Pakistan's rupee ends 2021 with back-to-back gains

After a horrendous 2021 that saw it lose 10% of its value, Pakistan's currency ended the final session of the year with a bang, appreciating Re1 against the US dollar in the inter-bank market on Friday.

As per the State Bank of Pakistan (SBP), the PKR closed at 176.51 against the USD after a day-on-day appreciation of 100 paisas or 0.57%. Earlier this week on Wednesday, the PKR had closed at its all-time record low of 178.24 against the USD.

“This is the third-highest percentage day-on-day recovery during CY21,” said Arif Habib Limited (AHL) in a research note.

The gain on Friday follows the one made on Thursday when the rupee broke its losing streak.

Cumulatively, the rupee depreciated nearly 10% CYTD, 10.68% FYTD, and 13.65% since its CY21’s high achieved on May 14 against the US dollar.

"The unexpected recovery of Pakistani rupee against US dollar comes as exporters have sold dollars in the market," Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company Limited, told Business Recorder.

“Exporters are encashing their LCs."

When asked about reports regarding central bank intervention, Tariq said, “I don’t think the SBP intervened.”

Talking about rupee performance throughout the year, Tariq said that the currency started off at 160 and also appreciated till mid-year.

“(However) opening of economies increased commodity prices, which created a balance-of-payments pressure, and drove inflation that was reflected in depreciation of the rupee,” he said.

Tariq said that the pressure would subside in the coming days, especially if the International Monetary Fund (IMF) board grants approval to Pakistan's Extended Fund Facility on January 12.

Inter-bank market rates for dollar on Friday

BID Rs. 176.45

OFFER Rs 176.55

Open-market movement

In the open market, the PKR gained 1.50 rupees for buying and one rupee for selling against USD, closing at 177.50 and 178.50, respectively.

Against Euro, the PKR gained 50 paisas for buying and one rupee for selling, closing at 199.50 and 201, respectively.

Against UAE Dirham, the PKR gained 60 paisas for buying and 70 paisas for selling, closing at 49.70 and 50.10, respectively.

Against Saudi Riyal, the PKR gained 30 paisas for buying and 40 paisas for selling, closing at 46.30 and 46.60, respectively.

Open-market rates for dollar on Friday

BID Rs 177.50

OFFER Rs 178.50

https://www.brecorder.com/news/40143...-to-back-gains

[MenInG]

he dollar price may cross Rs200 with the sudden imposition of a withholding tax on exchange companies, which are getting notices to the tune of hundreds of millions of rupees from the Federal Board of Revenue (FBR).

Representatives of the exchange companies told Dawn on Wednesday they are getting notices from the FBR on non-payment of the withholding tax that was withdrawn in 2016.

Tax notices have created panic among the exchange companies while their representatives insist the added cost will be passed on to customers, which may push the dollar rate beyond Rs200.

“The exchange companies are getting notices to pay up to Rs1 billion in withholding tax. It was implemented in 2014 and withdrawn in 2016,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan.

He said the companies will pass on the 16pc withholding tax to customers who will have to bear the added cost of up to Rs20 per dollar. This will result in the exchange rate of Rs200 or higher.

“It looks like a conspiracy against the government. There is lot of pressure on the exchange rate. The government is already facing criticism due to the devaluation,” he said.

Exchange companies say they will pass on the tax impact to customers

The black market will replace the legal business of the exchange companies if the dollar reaches Rs200, he said.

“The grey market has already taken a big chunk of our business. It offers a higher price. Dollars are being sold at higher rates to smugglers, hawala people and Afghans,” said Zafar Paracha, who runs one of the country’s largest exchange companies and also serves as general secretary of the same association.

An ‘A’ category exchange company that did not want to disclose its identity shared its FBR notice with Dawn. It showed the amount of over Rs1bn in withholding tax. The exchange company said it will pass this on to the currency market and the dollar rate will skyrocket. The dollar closed at Rs178.30 on Wednesday.

Mr Bostan said imposing the withholding tax makes no sense as the market is already volatile and the government is under pressure. “In a meeting with the FBR chairman, we informed him about the consequences of the 16pc withholding tax,” he said.

He noted that the FBR chairman assured the exchange companies that the notices would be withdrawn and that the companies would not face any harassment at the hands of the taxmen.

In the recent past, the exchange companies faced a number of restrictions with regard to their sales, although their businesses are fully documented, he said.

The government along with the State Bank of Pakistan took these measures to regulate this business in view of the Financial Action Task Force. Pakistan is in compliance with most of the FATF requirements, although it is still on the grey list of the watchdog that compels the authorities concerned to keep this business under tight control.

At the same time, the government also wants to get control of the outflow of dollars from the country.

Published in Dawn, January 20th, 2022

[MenInG]

Finance Minister Shaukat Tarin said on Saturday that the Pakistani rupee has started to gain ground against the US dollar after the release of the $1 billion tranche by the International Monetary Fund (IMF).

Speaking to PTV News in Beijing, Tarin said the rupee will continue to appreciate against the greenback. He added that he had been saying from the very beginning that there will be appreciation in the value of the Pakistani rupee.

The minister said he had warned "speculators and hoarders" that the rupee will move upward and "I am saying this again that the rupee will move [upward] again". They should keep faith in their "own rupee", he added.

Tarin said the visit to China was going very successful, adding that the prime minister and his team will meet the prime minister and president of China by Monday to discuss economic projects. "We are very hopeful about the prospects of the meeting as it would be good news for economic recovery," he added.

Rupee at two-month high

The rupee’s uptrend continued for the sixth successive day on Friday as the currency closed at a two-and-a-half-month high of Rs174.48 against the US dollar in the inter-bank market after exporters began selling the greenback.

Exporters returned to selling counters as the market expected an increased inflow of foreign currencies from multiple sources following the resumption of the International Monetary Fund’s (IMF) $6 billion loan programme a couple of days ago.

https://tribune.com.pk/story/2342102...to-gain-ground

[silentkiller187]

The rupee felt the heat of Russia-Ukraine conflict as the currency fell to a fresh all-time low at Rs178.61 against the US dollar in the inter-bank market on Tuesday on the back of surging oil prices coupled with the forecast of wheat shortage, which would increase the import cost for Pakistan.

According to the State Bank of Pakistan (SBP), the rupee had closed at Rs178.31 on Monday.

A report of Arif Habib Limited stated that the rupee shed 0.27% day-on-day while it was down 11.8% since the beginning of current fiscal year in July 2021.

Speaking to The Express Tribune, AA Gold Commodities Director Adnan Agar stated that the rupee was under pressure because a host of factors were strengthening the dollar in the international market.

The US dollar was climbing against most of the currencies around the world, he pointed out. “Moreover, a sharp rise in global oil prices is also mounting pressure on the rupee,” Agar said. “A wheat crisis is on the cards as well, which makes the foreign exchange market jittery.”

Prices of all commodities were on the rise, sparking fears of a big jump in inflation across the globe, he said, adding that local analysts were also forecasting a spike in inflation.

He was of the view that the rupee would remain under pressure until a ceasefire was agreed between Russia and Ukraine and oil prices plunged.

Arif Habib Commodities CEO and Managing Director Ahsan Mehanti said that a high current account deficit and surging import bill were resulting in weakening of the rupee.

“There is speculation in the market as well, which is affecting the movement of rupee against the greenback,” he pointed out.

He revealed that textile exports of Pakistan were under threat due to the Russia-Ukraine war. Furthermore, cement exports were declining because a hike in global coal prices made it costlier, which curtailed import orders.

“The geopolitical conflict will impact the overall export proceeds of Pakistan, which is impacting the local currency,” he said.

Alpha Beta Core Chief Executive Officer Khurram Schehzad stated that the current account deficit had widened to unsustainable levels and that mounted pressure on the rupee.

“The need for dollars is rising because of the surging import bill, hence, the rupee is slipping,” he said.

https://tribune.com.pk/story/2347038...er-bank-market

[MenInG]

Rising commodity prices and overall domestic political uncertainty pushed Pakistan's rupee to fall further against the US dollar, as the currency depreciated 0.23% to cross the 182 level for the first time and close at a new record low in the inter-bank on Monday.

As per the State Bank of Pakistan (SBP), the rupee closed at 182.19, its weakest level in history, after a day-on-day depreciation of 41 paisas. On Friday, the local currency dropped 0.03% to close at the then-record low of 181.78.

The rupee has lost over 16% since its most-recent high achieved in May last year. On a fiscal year to date (FYTD) basis, the local currency has depreciated over 13.5%.

During the previous week, the rupee fell 0.66%, losing value in 3 of the 4 sessions while remaining unchanged in the other, to end at a new record low of 181.78 against the US dollar in the inter-bank market.

The currency has remained under pressure even as Pakistan’s current account deficit shrunk in February, as falling foreign exchange reserves and out-of-control oil prices kept the market on edge.

Rupee loses value again, closes in on 182 against US dollar

Meanwhile, oil prices, one of the key determinants of currency parity, tumbled more than $5 on Monday as fears over weaker fuel demand in China grew after financial hub Shanghai launched a two-stage lockdown to contain a surge in COVID-19 infections.

Brent crude futures slid as low as $115.32 a barrel and were trading down $5.15, or 4.3%, at $115.50, while US West Texas Intermediate (WTI) crude futures hit a low of $108.28 a barrel, and were down $5.30, or 4.7%, at $108.60.

Expectations of a high import bill in the coming months have remained intact, however, say market experts. Additionally, rising political noise amid the opposition’s no-confidence motion against Prime Minister Imran Khan have also contributed to worsening market sentiments.

“The Ukraine and Russia crisis has pushed up commodity prices in the international markets, including oil, coal, steel and gold, which has raised concern over the rising import bill in the month of March,” Zafar Paracha, General Secretary at Exchange Companies Association of Pakistan (ECAP), told Business Recorder.

“Furthermore, the rise in domestic political noise has also irked market sentiment, leading to pressure on PKR,” he said.

Paracha said that the maturity dates for the repayments of international loans especially those from China are also around the corner, which may add pressure on the foreign exchange position.

Inter-bank market rates for dollar on Monday

BID Rs 182.10

OFFER Rs 182.20

Open-market movement

In the open market, the PKR lost 30 paisas for both buying and selling against USD, closing at 182.30 and 183.30, respectively.

Against Euro, the PKR gained 1.60 rupees for buying and 1.55 rupees for selling, closing at 197.50 and 199.45, respectively.

Against UAE Dirham, the PKR gained 10 paisas for both buying and selling, closing at 49.81 and 50.30, respectively.

Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 48.30 and 48.75, respectively.

Open-market rates for dollar on Monday

BID Rs 182.30

OFFER Rs 183.30

https://www.brecorder.com/news/40163...er-bank-market

[Romali_rotti]

Wow 182 rupees to a US dollar ?

What is Russia now trading at ? 212 to a US dollar ?

I didn't know situation in Pakistan was this bad..

[MenInG]

KARACHI: The rupee plunged to a historic low of Rs183.70 against the US dollar in the interbank market after the State Bank of Pakistan (SBP) reported a massive outflow of $2.9 billion on Thursday.

The SBP announced that its foreign exchange reserves dropped to $12.047bn during the week ended on March 25 due to a major repayment of Chinese loans while the rest was regular debt servicing. “This decline reflects repayment of external debt including a major syndicated loan facility from China,” said the SBP.

The SBP did not mention the specific figure as repayment to Chinese syndicated loans. However, media repo*rts suggested that the SBP had repaid $2.4bn to China.

“The rollover of this syndicated facility is being processed and is expected shortly,” said the SBP, adding that the amount is expected to come back in the reserves after completion of the rollover process.

Foreign Minister Shah Mehmood Qureshi, who is in China, said that his Chinese counterpart had assured him that Beijing has agreed in principle for granting rollover of $2.4bn in commercial loans to Pakistan.

The SBP reserves have been falling since August 2021 despite $2bn inflows from IMF and sukuk proceeds. The foreign exchange reserves of the SBP have fallen by $8.026bn to $12.047bn from $20.073bn in August 2021. It was the lowest since October 2020.

The political crisis in Pakistan resulted in outflows of foreign investments in the domestic bonds which weakened the local currency. About $387m from the Pakistan Investment Bonds and treasury bills left Pakistan in March alone.

Pakistan borrowed heavily from China during the last three years to meet its foreign obligations while the previous debts of the Paris Club and other financial institutions have already burdened the economy.

The increasing growth in imports created a wide trade deficit which ultimately resulted in over a $12bn current account deficit, so far, in FY22. Currency experts and dealers said the situation had further deteriorated due to the growing uncertainty on the political front.

The dollar climbed to Rs183.70 but closed the session at Rs183.48 in the interbank market. The SBP has been trying to keep the market cool by allowing the dollar to appreciate gradually.

“The rupee is plugging fast due to encashment of portfolio investment. Moody’s comments on increased vulnerability due to political uncertainty accelerate the fall,” said currency analyst Eman Khan of Tresmark.

The country’s overall reserves fell to $18.554bn while the holdings of the commercial banks were $6.507bn during the week.

Published in Dawn, April 1st, 2022

[MenInG]

The Pakistani currency recorded a sharp drop of Rs3.39 on Thursday and plunged to an all-time low of Rs189.51 against the US dollar in intra-day trading in the inter-bank market owing to political turmoil in the country.

The domestic currency had closed at Rs186.13 against the greenback on Wednesday.

Sources said that rupee dropped beyond Rs190 in the open market because only a nominal amount of the foreign currency is available for buying by individuals.

Experts said that uncertain domestic political situation was mounting pressure on the rupee.

Besides, the central bank also refrained from intervening in the market to rescue the sinking rupee. The country's foreign exchange reserves have depleted rapidly over the past six to seven weeks to a two year low of $12 billion.

Analysts stated that pressure mounted on rupee after the International Monetary Fund (IMF) once again placed its $6 billion bailout programme on hold.

Besides, Pakistan’s trade deficit shot up 70% to $35.5 billion in the first nine months of current fiscal year 2022 which added to the depreciation.

Express Tribune

[Major]

As imran leaves his action caused the ruppee to drop further...

[Technics 1210]

Markets are aware of the corrupt government that may ensue, Rupee to plummet.

Markets had more confidence in IK.

Who are the beneficiaries of corrupt parties going to blame for rocketing fuel prices now?

[wasim-fan]

Markets are aware of the corrupt government that may ensue, Rupee to plummet.

Markets had more confidence in IK.

Who are the beneficiaries of corrupt parties going to blame for rocketing fuel prices now?

That confidence brought the rupee from 120 to 180

[Technics 1210]

That confidence brought the rupee from 120 to 180

No, that was mainly due to the strengthening of the USD, even GBP and EUR declined in the same period vs USD.

Still, enjoy the prospect of hyperinflation now.

[pakistanisgreat]

That confidence brought the rupee from 120 to 180

you nailed it

[Major]

That confidence brought the rupee from 120 to 180

, They actually want pakistan to do bad economically because imran ia gone

[Major]

No, that was mainly due to the strengthening of the USD, even GBP and EUR declined in the same period vs USD.

Still, enjoy the prospect of hyperinflation now.

Despicable, you want pakistan to suffer from hyper inflation.

And than people like u say we want to vote

[Technics 1210]

Despicable, you want pakistan to suffer from hyper inflation.

And than people like u say we want to vote

Please stop. You support a corrupt government and have the audacity to talk about Pakistani people suffering while you line your pockets. Disgusting.

Buy some overseas properties!

[Major]

Please stop. You support a corrupt government and have the audacity to talk about Pakistani people suffering while you line your pockets. Disgusting.

Buy some overseas properties!

atleast i dont go around saying that my favourite leader isnt there thus the country should be destroyed by hyper inflation while living in foreign lands.

[Technics 1210]

atleast i dont go around saying that my favourite leader isnt there thus the country should be destroyed by hyper inflation while living in foreign lands.

So you admit to lining your pockets.

See yah!

[Major]

So you admit to lining your pockets.

See yah!

how is that admitting?

If a mad man throws you insults and you ignore, can than man mad go around claiming that because the other ignored by swears that means what I said must be true.

When people like you say that pakistani should suffer from hyper inflation because your favorite cricketer isnt pm, that only validates my point that voting rights shouldn't be given to peeople like you who live abraod

[Colorblind Genius]

how is that admitting?

If a mad man throws you insults and you ignore, can than man mad go around claiming that because the other ignored by swears that means what I said must be true.

When people like you say that pakistani should suffer from hyper inflation because your favorite cricketer isnt pm, that only validates my point that voting rights shouldn't be given to peeople like you who live abraod

By the same logic,

When the likes of you decide to support crooks and looters to cripple the country’s economy under heavy debt, then you shouldn’t have the right to vote either. I think it’s only fair.

[Technics 1210]

how is that admitting?

If a mad man throws you insults and you ignore, can than man mad go around claiming that because the other ignored by swears that means what I said must be true.

When people like you say that pakistani should suffer from hyper inflation because your favorite cricketer isnt pm, that only validates my point that voting rights shouldn't be given to peeople like you who live abraod

Learn to read before you ignore and reply, I said ‘enjoy the prospect of hyperinflation’ - do you understand what this means?

You are a liar, just like every other corrupt supporter, I NEVER said Pakistanis should suffer.

Now go line your pockets since you do not deny that you do.

[Major]

Learn to read before you ignore and reply, I said ‘enjoy the prospect of hyperinflation’ - do you understand what this means?

You are a liar, just like every other corrupt supporter, I NEVER said Pakistanis should suffer.

Now go line your pockets since you do not deny that you do.

you spin it anyway you want it but you are hoping to see hyper inflation in Pakistan.

pathetic

[Technics 1210]

you spin it anyway you want it but you are hoping to see hyper inflation in Pakistan.

pathetic

You got caught lying and spinning yarns.

Now move on, you were blaming IK for the decline in the Rupee, rising costs, rising inflation, and now he will not be at the helm, you are already bricking it.

[Clueless]

You got caught lying and spinning yarns.

Now move on, you were blaming IK for the decline in the Rupee, rising costs, rising inflation, and now he will not be at the helm, you are already bricking it.

Pakistan's economic decline is much more fundamental and systemic, no matter who is at the helm.

[MenInG]

The Pakistani rupee bounced back on Friday to gain Rs3.18 against the US dollar in intra-day trading after Supreme Court declared the NA deputy speaker ruling unconstitutional and restored National Assembly, ARY News reported.

According to foreign currency dealers, the US dollar is trading at Rs185 after depreciating Rs3.18 against the local currency in early trade.

In the open market, the dollar is trading at over Rs186.

ARY

[MenInG]

Pak rupee today gained sharply against the dollar - was trading around Rs 191 in the open market on April 8 - today at Rs 184-185

[KingKhanWC]

The few rupee gains has nothing to do with Sharif being a comedy PM now.

Its a global market. The US dollar has been fluctuating but mostly declining since Feb 2022. Putin says hi.

[JaDed]

The few rupee gains has nothing to do with Sharif being a comedy PM now.

Its a global market. The US dollar has been fluctuating but mostly declining since Feb 2022. Putin says hi.

On the contrary $ is doing really well, 180 PKR is actually the right place right now, falling to 190 was just an overreaction to political instability and IMF delay nothing to do with the government.

With all that IMF bailout coming back it might hit 170-175 mark.

[KingKhanWC]

On the contrary $ is doing really well, 180 PKR is actually the right place right now, falling to 190 was just an overreaction to political instability and IMF delay nothing to do with the government.

With all that IMF bailout coming back it might hit 170-175 mark.

US dollar was 1.35 v £ in Feb, now 1.29. This is more accurate than measuring against rupee.

Once nations start paying for Oil in other currencies it will be the start of the end of the $.

The $ will collapse by the end of this decade.

[Colorblind Genius]

The Crime minister has order to increase salaries - which simply means he is printing more and more money - and that will kick up the inflation even more.

Fun times.

[JaDed]

US dollar was 1.35 v £ in Feb, now 1.29. This is more accurate than measuring against rupee.

Once nations start paying for Oil in other currencies it will be the start of the end of the $.

The $ will collapse by the end of this decade.

That’s what many said on forum in 2008 and here it is, but obviously it will end one day but it’s a topic for different thread.

[MenInG]

The rupee staged a sharp recovery on Monday as it appreciated Rs1.75 in the inter-bank market to close at Rs182.93 against the US dollar aided primarily by the easing political noise and the emergence of clarity.

Investor speculation ended in the foreign exchange market as the political scene turned stable ahead of the formation of a new government.

According to the State Bank of Pakistan (SBP), the rupee had closed at Rs184.68 against the greenback on Friday.

A report of Arif Habib Limited stated that the rupee appreciated 0.96% day-on-day, but it was still down 13.88% since the beginning of current fiscal year on July 1, 2021.

“In the last two trading sessions, the rupee recovered 2.85%,” it said.

Speaking to The Express Tribune, Arif Habib Commodities CEO Ahsan Mehanti said that political turbulence had largely eased, which helped the rupee to make a sharp recovery against the US dollar.

“The market had turned speculative over the past few days, which was driving the rupee’s decline,” he said. “Secondly, the measures taken by the State Bank of Pakistan are proving to be supportive for the economy, particularly the rupee.”

He pointed out that last week the central bank imposed 100% cash margin on 177 imported products and that measure provided massive support for the rupee.

Moreover, the State Bank also raised the benchmark interest rate by 2.5 percentage points to 12.25%, propping up the rupee against the US dollar.

“However, the main reason is the falling political noise in the country,” he said.

Echoing similar views, Pak-Kuwait Investment Company Head of Research Samiullah Tariq agreed that political clarity was steering the appreciation of the rupee.

According to him, people were of the view that weakening economic cues could now come under control, hence, the rupee was appreciating.

“Moreover, commodity prices are expected to recede as well, therefore, there is optimism in the foreign exchange market,” he said.

Published in The Express Tribune, April 12th, 2022.

[MenInG]

After seven days of modest recovery, the rupee depreciated once again on Monday and shed Rs0.99 against the US dollar in the inter-bank market to close at Rs182.54 owing to the return of speculation in the foreign currency market and uncertainty about the resumption of International Monetary Fund (IMF) loan programme.

According to the State Bank of Pakistan (SBP), the rupee closed at Rs181.55 on Saturday.

“After a gain of 3.61% in seven consecutive sessions, the rupee slid 0.54% day-on-day on Monday,” stated a report of Arif Habib Limited.

It added that the local currency had lost 16.58% since the start of the ongoing fiscal year on July 1, 2021.

Speaking to The Express Tribune, Arif Habib Commodities Chief Executive Officer and Managing Director Ahsan Mehanti stated that speculation had returned to the foreign exchange market as the resumption of IMF programme did not look imminent.

“Moreover, the people now expect the IMF to come up with difficult terms that will need to be incorporated into the next budget,” he said. “Uncertainty regarding engagement with the IMF has mounted pressure on the rupee.”

AA Gold Commodities CEO Adnan Agar cited that lack of clarity over the IMF programme was the prime factor driving the rupee’s decline.

Moreover, the cabinet of Prime Minister Shehbaz Sharif had not yet been formed, therefore, there was general panic in the market, which led to fluctuation of the rupee, he said.

Finally, dollars flew out of Pakistan over the past few days for different reasons and it would take time to attract the same amount back to the country, hence that factor was also weighing on the local currency, he said.

Arif Habib Limited Head of Research Tahir Abbas stated that the rupee fell after a seven-day uptrend, which was driven by political clarity.

“The rupee is moving back to equilibrium aided by market fundamentals,” he said.

He, however, held the view that the rupee could appreciate to Rs177-178 against the US dollar in the coming days. “There is enough room for further appreciation of the rupee against the greenback,” he said.

Published in The Express Tribune, April 19th, 2022.

[MenInG]

The US dollar on Wednesday continued taking big strides to reach the level it had attained against the local currency in the first week of this month amid a deepening political crisis.

The currency dealers in the interbank market said the dollar was traded as high as Rs186 during the day but was finally closed at Rs185.92.

The dollar gained Rs1.48 on a day-on-day basis reflecting the increasing weakness of the economy and its representative currency.

Currency dealers didn’t see any chance of rupee’s recovery in the near term saying the persisting political uncertainty was supporting the US dollar which is making sharp gains.

When the dollar climbed to an all-time high on April 7, most currency experts found the exchange rate was going up mostly based on speculation. However, with the change of government in Islamabad, the dollar plunged to Rs181.5 but it resumed its upward journey and rose to Rs185.92 in just four sessions.

Currency dealers are not sure about the future direction of the exchange rate as the political settlement does not look credible for the investors and traders.

Foreign investors have already stopped investing in the country while the outflows of dollars from commercial banks’ accounts were also noted in March.

Published in Dawn, April 21st, 2022

[moh12]

What are the thought on GBP to PKR? Nearing 250 soon. I converted some funds for use later in the year but in two minds of doing more in case the rate keeps rising.

[Bewal Express]

The big news will come when the remittances figures come out for April. If they drop by even 10%, the Rp is heading for 210-15. If Roshan Digital takes a hit then again this process will be accelerated. The other bit no one knows about is what will happen to the oil price. If that goes to 130-140, we will start to look at 250 for each dollar. The damage done by Darnomics with his artificially inflated Rp will take years to repair

[daytrader]

Rupee hits all-time low against dollar

KARACHI: The rupee continued its slide against the dollar on Tuesday with the international currency hitting an all-time high of Rs188.66 in the interbank market.

According to the State Bank of Pakistan (SBP), the rupee lost 0.6 per cent or Rs1.13 on a day-on-day basis. The US currency appreciated by Rs1.84 in the preceding two sessions.

The rising exchange rate has rattled the economy. The rupee has been losing its value mainly because of an uncontrolled rise in imports and a relatively slower pace of growth in exports. This is reflected in the trade deficit, which reached $39 billion in July-April.

Currency dealers say higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund — has further eroded the confidence of stakeholders.
https://www.dawn.com/news/1689067/ru...against-dollar

[Kianig89]

Rupee continues to pummel and this trend will continue till the imported crooks are here amid the uncertainty investors cannot be attracted so expert the steepl curve upward

[MenInG]

The rupee continued to lose ground against the US dollar on Thursday, as the greenback reached an all-time high of Rs192 in the interbank market.

According to the Forex Association of Pakistan, the dollar breached the 191-mark at the day's start and soared to Rs192.20 around 11:45am, appreciating by Rs2 from the previous day's close of 190.20 — the record high value for the dollar before today's session.

Asad Rizvi, the treasury head at Chase Manhattan Bank, told Mettis Global — a web-based financial data and analytics portal — that the Pakistani rupee had depreciated by nearly nine per cent against the dollar since the time of the Russian invasion of Ukraine to "hit all-time new lows".

He further pointed out that the economic slowdown and higher oil prices as a result of the Russian offensive had also dented other currencies, including the Indian rupee, and accelerated inflation. And there was "no respite in sight", he said.

This freefall of the rupee against the dollar has also been attributed to the country's high import bill as well as delay in the release of a $1 billion tranche by the International Monetary Fund.

A Dawn report on Wednesday said the rising exchange rate had rattled the economy.

The rupee had been losing its value mainly because of an uncontrolled rise in imports and a relatively slower pace of growth in exports. This was reflected in the trade deficit, which reached $39 billion in July-April.

Currency dealers said higher demand for dollar was the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund — had further eroded the confidence of stakeholders.

The day-to-day devaluation of the local currency could cause a serious panic-like situation as investors are found clueless. The rising inflation and the devaluation of the local currency mean declining purchasing power of consumers as traders ask for higher profits to save their investments.

Currency experts and dealers fear that the rupee will fall more rapidly in the coming days unless and until inflows from anywhere appear on the horizon.

Currency dealer Zafar Paracha has termed the situation "dangerous" and fears that in light of the growing demand of dollar, the greenback's value may reach Rs200 soon.

Meanwhile, Malik Bostan, chairman of the Forex Association of Pakistan, said the interbank market was "more unsettled" than the open market, and this had led to an increase in the demand for the dollar.

Moreover, he said individuals intending to go for Haj were buying dollars due to a shortage of the Saudi riyal and this had resulted in a rise in the dollar's value in the open market as well. But, he believed that this increase in the greenback's demand was transient.

He was hopeful that the International Monetary Fund agreeing to increase the size of its $6 billion loan programme by $2bn — a possibility that the international moneylender has made conditional to the complete reversal of energy subsidies introduced by the ousted PTI government — would lead to the rapid recovery of the rupee.

However, the government has so far remained undecided about the reversal of these fiscally unsustainable subsidies.

Importer and former president of Karachi Chamber of Commerce and Industry Abdullah Zaki, meanwhile, decries growing difficulties in the aftermath of the dollar's rise.

He told Dawn.com that the price of imported commodities had increased and eventually, end consumers would have to bear its consequences.

[MenInG]

Rupee at all time low Rs193/$ (from Rs178/ on 8March); Interest rates at 15% highest since 1998; stock market down 3,000 pts or 6.4%; stock market lost Rs604 billion capitalisation; Inflation 13.4% highest since Jan 2020. Reflects lowest ever confidence in Imported government.

— Imran Khan (@ImranKhanPTI) May 13, 2022

[MenInG]

The Pakistani rupee continued its nosedive against the US dollar on Friday, for the fifth consecutive working day, as it declined by 0.64% (Rs1.23) to a new historical low, reaching Rs193 against the greenback in the inter-bank market.

The domestic currency had closed at Rs191.77 against the global currency a day earlier, according to the State Bank of Pakistan (SBP).

The latest depreciation recorded was followed by the central bank's report on Thursday that the country's foreign exchange reserves had depleted to a 22-month low, at $10.3 billion.

The dwindling reserves have continued to weaken the country's balance of payments, as a result, Pakistan's ability to import and repay foreign debt has contracted during the past several months. The $10.3 billion reserve has reduced the country's import cover to less than two-months as compared to the usual three-month import cover.

Pakistan is scheduled to begin talks with the International Monetary Fund (IMF) on May 18 in Doha, as the country’s options to avoid insolvency have been limited after it could not immediately receive any major financial support from its three friendly countries.

The country is anticipating the resumption of the multi-billion dollar loan programme which has been on hold for the past 11 months.

The success of the talks would follow the release of the IMF tranche of $1 billion to Islamabad to stabilize foreign exchange reserves.The revival of the programme is likely to be followed by additional inflows from bilateral and multilateral lenders.

Subject to the financial watchdog's conditions, Prime Minister Shehbaz Sharif will have to overcome all obstacles from his cabinet members before talks resume and finalise a decision on fuel subsidies.

Sources told The Express Tribune that the premier had directed the finance ministry to once again ask the IMF to partially relax its condition of increasing fuel prices.

The development comes amid a delay in finalisation of new loan deals with Saudi Arabia, China and the United Arab Emirates (UAE).

Express Tribune

[MenInG]

Finance Minister Miftah Ismail has held previous PTI-led government responsible for the current economic crisis in the country, saying that former prime minister Imran Khan-led regime’s “flawed agreement” with the International Monetary Fund (IMF) led to a rise in inflation and depreciation of rupee against US dollar.

“If we get out of the clutches of the agreement Imran Khan inked with IMF, only then the rate of dollar will come down. Reviving the economy that Imran Khan left is not an easy task,” he said in a statement on Friday.

He added that the subsidy on petroleum products announced by the PTI government had put financial pressure on the economy.

Fuel subsidies were estimated at Rs120 billion this month, the minister said, adding that no government can bear the burden of such a large amount of subsidies. If the government does not have money and it still gives subsidy then it has to borrow more, he added.

Pressure on the rupee is mounting due to rising interest rates and Imran Khan-led government borrowed loans worth Rs20,000 billion which is largest ever amount in the country’s history, said Miftah.

Due to this debt, the PML-N-led government came under severe financial pressure and the foreign exchange reserves left by the previous government are only sufficient to pay for only few days of import bill, he added.

Miftah said PTI-led government violated the conditions of the IMF agreement which put the programme on hold.

“We have to renew the IMF agreement. Imran created problems in relations with all countries, including China and Saudi Arabia,” he added.

The Pakistani rupee continued its nosedive against the US dollar on Friday, for the fifth consecutive working day, as it declined by 0.64% (Rs1.23) to a new historical low, reaching Rs193 against the greenback in the inter-bank market.

The domestic currency had closed at Rs191.77 against the global currency a day earlier, according to the State Bank of Pakistan (SBP).

The latest depreciation recorded was followed by the central bank's report on Thursday that the country's foreign exchange reserves had depleted to a 22-month low, at $10.3 billion.

The dwindling reserves have continued to weaken the country's balance of payments, as a result, Pakistan's ability to import and repay foreign debt has contracted during the past several months. The $10.3 billion reserve has reduced the country's import cover to less than two-months as compared to the usual three-month import cover.

Pakistan is scheduled to begin talks with the International Monetary Fund (IMF) on May 18 in Doha, as the country’s options to avoid insolvency have been limited after it could not immediately receive any major financial support from its three friendly countries.

Express tribune

[MenInG]

The depreciation of the Pakistan Rupee against the US dollar continued on Monday as the rupee sunk to a historic low of Rs194 against the greenback in the inter-bank market.

The rupee had closed at Rs192.53 on Friday, according to the central bank. However, today it shed Rs1.70 against the dollar to touch Rs194.23.

According to experts, the balance of payment crisis which might worsen further amid a potential hike in energy prices is mounting pressure on the rupee. This potential hike would affect Pakistan significantly as it relies heavily on imported energy. The energy import bill is already up by 72% in the first 10-month of the current fiscal year 2022.

Similarly, the country's foreign exchange reserves have depleted to a 22-month low at $10.3 billion. Therefore, the country's import cover has been reduced to just 45 days at present compared to the usual 90 days import cover.

In addition to that, Pakistan is also estimated to pay an additional $4.4 billion on foreign debt repayment over the next two months.

In order to avoid a default, the government needed to convince the IMF to restore the ballot package it had signed with the PTI government in 2019. However, the prior condition by the IMF to remove the oil subsidies has not been met by the PML-N government as it postponed the decision once again on Sunday. Islamabad is scheduled to hold a new round of talks with the IMF on Wednesday in Doha.

Express Tribune

[MenInG]

In the midst of dwindling foreign exchange reserves and the massive devaluation of the local currency, Prime Minister Shehbaz Sharif has directed the policymakers to devise a comprehensive strategy in consultation with the stakeholders to halt the rupee’s free fall and improve reserves.

Chairing a Zoom meeting on Monday with the Chairman Exchange Companies Association of Pakistan (ECAP) Malik Bostan, the prime minister expressed his concern over the current situation.

Finance Minister Miftah Ismail had discussed in detail the exchange rate situation with a ECAP team on Saturday last.Mr Bostan said another Zoom meeting with the prime minister and the State Bank of Pakistan (SBP) governor is scheduled for Tuesday to discuss the worrying rupee relationship with the US dollar.

The three meetings within four days reflect the growing frustration in the power corridors of Islamabad. Currency experts said it is not easy to control the situation since the reserves have been declining while the inflows are taking more than expected time to support the exchange rate.

Holds Zoom meeting with currency dealers

Pakistan expects to get a loan from the International Monetary Fund, a rollover of $2.3bn from China and help from Saudi Arabia. The hope to raise dollars from the international market through the launching of Sukuk bonds is not getting support due to the weak external accounts of the country.

During the previous government, the SBP supported the free floating exchange rate, which worked well initially, but it started depreciating the local currency rapidly. The fiscal year FY22 was the worst, with the SBP’s reserves falling by half and the rupee falling by more than 20pc.

“It is the open market or exchange companies that increase the dollar rates. In fact, the commercial banks have been increasing the rate,” Mr Bostan told the prime minister.

The importers are opening more LCs due to the uncertain exchange rate while the exporters are surrendering fewer export proceeds, causing a shortage of dollars, he said.

In the previous meeting with the adviser on finance last Saturday, the representatives of exchange companies proposed to ban all imports except essential items.

“If someone feels imports of more items are necessary, he should arrange the dollars himself,” Zafar Paracha, general secretary of ECAP, suggested.

During the meeting, it was also suggested that entire markets across the country should be closed down before the sunset, which would save a substantial amount of energy, reduce the import oil bill and the supply to the general public could be restored.

Experts and analysts have suggested in their reports that any attempt to repeat the previous mechanism to bring down dollar prices would be counterproductive for the economy.

The head of research said that the exchange rate should be based on market-driven forces, adding that the government must avoid adopting any artificial mechanism to improve rupee value.

Published in Dawn, May 17th, 2022

[daytrader]

Dollar upward march continues, interbank trading at record Rs196.10

The US dollar continued its flight against the rupee for the sixth consecutive session on Tuesday to breach the Rs196 mark — an all-time high — in interbank trade, mainly due to the country's depleting foreign exchange reserves and high imports.

According to the Forex Association of Pakistan (FAP), the greenback gained Rs1.50 from the previous day's close of Rs194.60 to climb to Rs196.10 around 11:20am.

This spell of the dollar's persistent rise against the rupee began on Tuesday last week, when the international currency hit a record high of Rs188.66. It then soared to Rs190.90 on Wednesday, rose past Rs192 on Thursday, reached Rs193.10 on Friday and climbed over Rs194 yesterday (Monday).

While the FAP data showed that the greenback closed Rs194.60 on Monday, the State Bank of Pakistan recorded the closing rate at Rs194.18. A Dawn report, while quoting the SBP's closing rate, said that the international currency was traded at higher rates before settling at Rs194.18.

The Dawn report highlighted that while the dollar kept the rupee in its strong clutch during the entire fiscal year FY22, the last two months proved the worst.

Moreover, a Dawn.com report said on Monday that the when the PML-N-led coalition government took over on April 11, the dollar was valued at Rs182.3, and since then, the rupee had lost Rs11.4 or 6.2 per cent of its value.

According to currency dealers, the dollar demand never comes down, which did not allow the local currency to stay at any point.

They say the higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund (IMF) — has further eroded the confidence of stakeholders.

Meanwhile, the decline in the rupee is also fuelled by an uncontrolled increase in imports coupled with a relatively slower pace of growth in exports.

The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72pc, leaving no room for the government to improve its external balance.

Moreover, foreign exchange reserves of the central bank have touched $10.3 billion, lowest since June 2020.

Currency dealers said the unexpectedly high imports bill and low foreign investment were not in support of the exchange rate while over $13bn current account deficit was already there as a challenge for the government.

Exchange Companies Association of Pakistan further identified the uncertainty surrounding the release of a $1 billion tranche as another factor contributing to the rupee's decline.

He explained the release of funds by the IMF as a "benchmark", saying that if the Fund was to approve the payment, other international institutions would gain confidence and follow suit.

Dealers in the inter-bank told Dawn on Monday that there was no chance for improvement in the exchange rate.

“The dollar will appreciate every day until and unless the government takes some concrete measures to stop this free fall,” said currency dealer Atif Ahmed.

'Strict measures' needed to prevent dollar hitting Rs200-mark
In the midst of dwindling foreign exchange reserves and the massive devaluation of the local currency, Prime Minister Shehbaz Sharif has directed the policymakers to devise a comprehensive strategy in consultation with the stakeholders to halt the rupee’s free fall and improve reserves.

He also held a Zoom meeting with Exchange Companies Association of Pakistan (ECAP) chairperson Malik Bostan on Monday and expressed concern over the current situation.

Speaking to Dawn.com today, Bostan said the "effects of yesterday's meeting will soon be seen on the market".

He also emphasised that in order to curtail the dollar's flight and prevent it from reaching the Rs200 mark, "the government will have to take strict measures". In this regard, he suggested restrictions on imports on bounding exporters to bring in revenue from exports.

Bostan said if the government managed to control the dollar's rate in the interbank market, "we will expeditiously bring the dollar's value down in the open market".

Prior to PM Shehbaz's meeting with Bostan, Finance Minister Miftah Ismail had discussed in detail the exchange rate situation with a ECAP team.

During the meeting, it was suggested that entire markets across the country should be closed down before the sunset, which would save a substantial amount of energy, reduce the import oil bill and the supply to the general public could be restored.

Moreover, the representatives of exchange companies called for a ban on all imports except essential items.

“If someone feels imports of more items are necessary, he should arrange the dollars himself,” Zafar Paracha, general secretary of the ECAP, had suggested.

He reiterated while speaking to Dawn.com today, as he went on to call for imposing an "economic emergency" and urge political parties to sit together to devise a plan for stabilising the economy.

He also called on the government to put an end to the unnecessary expenditure on parliamentarians' "perks and luxuries", warning that if these measures were not taken, situation in Pakistan could turn like that in Sri Lanka, which is currently facing a severe economic crisis.

According to a Dawn report, the PM would hold another meeting with Bostan and the SBP governor on the exchange rate today.

This will be the third meeting held by the government on the issue in four days and reflect the growing frustration in the power corridors of Islamabad, the report said.

https://www.dawn.com/news/1690113/do...record-rs19610

[silentkiller187]

The US dollar continued its flight against the rupee for the sixth consecutive session on Tuesday to breach the Rs196 mark — an all-time high — in interbank trade, mainly due to the country's depleting foreign exchange reserves and high imports.

According to the Forex Association of Pakistan (FAP), the greenback gained Rs1.90 from the previous day's close of Rs194.60 to climb to Rs196.50 around 1:00pm.

This spell of the dollar's persistent rise against the rupee began on Tuesday last week, when the international currency hit a record high of Rs188.66. It then soared to Rs190.90 on Wednesday, rose past Rs192 on Thursday, reached Rs193.10 on Friday and climbed over Rs194 yesterday (Monday).

While the FAP data showed that the greenback closed Rs194.60 on Monday, the State Bank of Pakistan recorded the closing rate at Rs194.18. A Dawn report, while quoting the SBP's closing rate, said that the international currency was traded at higher rates before settling at Rs194.18.

The Dawn report highlighted that while the dollar kept the rupee in its strong clutch during the entire fiscal year FY22, the last two months proved the worst.

Moreover, a Dawn.com report said on Monday that the when the PML-N-led coalition government took over on April 11, the dollar was valued at Rs182.3, and since then, the rupee had lost Rs11.4 or 6.2 per cent of its value.

According to currency dealers, the dollar demand never comes down, which did not allow the local currency to stay at any point.

They say the higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund (IMF) — has further eroded the confidence of stakeholders.

Meanwhile, the decline in the rupee is also fuelled by an uncontrolled increase in imports coupled with a relatively slower pace of growth in exports.

The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72pc, leaving no room for the government to improve its external balance.

Moreover, foreign exchange reserves of the central bank have touched $10.3 billion, lowest since June 2020.

Currency dealers said the unexpectedly high imports bill and low foreign investment were not in support of the exchange rate while over $13bn current account deficit was already there as a challenge for the government.

Exchange Companies Association of Pakistan further identified the uncertainty surrounding the release of a $1 billion tranche as another factor contributing to the rupee's decline.

He explained the release of funds by the IMF as a "benchmark", saying that if the Fund was to approve the payment, other international institutions would gain confidence and follow suit.

Dealers in the inter-bank told Dawn on Monday that there was no chance for improvement in the exchange rate.

“The dollar will appreciate every day until and unless the government takes some concrete measures to stop this free fall,” said currency dealer Atif Ahmed.

'Strict measures' needed to prevent dollar hitting Rs200-mark
In the midst of dwindling foreign exchange reserves and the massive devaluation of the local currency, Prime Minister Shehbaz Sharif has directed the policymakers to devise a comprehensive strategy in consultation with the stakeholders to halt the rupee’s free fall and improve reserves.

He also held a Zoom meeting with Exchange Companies Association of Pakistan (ECAP) chairperson Malik Bostan on Monday and expressed concern over the current situation.

Speaking to Dawn.com today, Bostan said the "effects of yesterday's meeting will soon be seen on the market".

He also emphasised that in order to curtail the dollar's flight and prevent it from reaching the Rs200 mark, "the government will have to take strict measures". In this regard, he suggested restrictions on imports on bounding exporters to bring in revenue from exports.

Bostan said if the government managed to control the dollar's rate in the interbank market, "we will expeditiously bring the dollar's value down in the open market".

Prior to PM Shehbaz's meeting with Bostan, Finance Minister Miftah Ismail had discussed in detail the exchange rate situation with a ECAP team.

During the meeting, it was suggested that entire markets across the country should be closed down before the sunset, which would save a substantial amount of energy, reduce the import oil bill and the supply to the general public could be restored.

Moreover, the representatives of exchange companies called for a ban on all imports except essential items.

“If someone feels imports of more items are necessary, he should arrange the dollars himself,” Zafar Paracha, general secretary of the ECAP, had suggested.

He reiterated while speaking to Dawn.com today, as he went on to call for imposing an "economic emergency" and urge political parties to sit together to devise a plan for stabilising the economy.

He also called on the government to put an end to the unnecessary expenditure on parliamentarians' "perks and luxuries", warning that if these measures were not taken, situation in Pakistan could turn like that in Sri Lanka, which is currently facing a severe economic crisis.

According to a Dawn report, the PM would hold another meeting with Bostan and the SBP governor on the exchange rate today.

This will be the third meeting held by the government on the issue in four days and reflect the growing frustration in the power corridors of Islamabad, the report said.

https://www.dawn.com/news/1690113/do...record-rs19650

[MenInG]

The US dollar continued its rising streak against the rupee on Tuesday, rising past Rs197 in interbank trading and marking the completion of a week of breaking records, largely on account of the country's rising exports and depleting foreign reserves.

According to the Forex Association of Pakistan (FAP), the greenback gained Rs1.10 from the previous day's close of Rs196.50 and climbed to Rs197.60 around 10:15am.

The current spell of the dollar's persistent rise against the rupee began on Tuesday last week, when the international currency hit a record high of Rs188.66. It then soared to Rs190.90 on Wednesday, rose past Rs192 on Thursday, reached Rs193.10 on Friday, climbed over Rs194 on Monday and surged past Rs196 yesterday (Tuesday).

While the FAP data showed that the greenback closed Rs196.50 on Tuesday, a Dawn report cited the State Bank of Pakistan's closing rate at Rs195.74 — a figure that signified that US currency was closing in on the psychological barrier of Rs200.

Another Dawn report highlighted on Tuesday that while the dollar kept the rupee in its strong clutch during the entire fiscal year FY22, the last two months proved the worst.

Asad Rizvi, former treasury head-chase of Manhattan Bank, told Mettis Global on Tuesday that “even persistent inflow of record remittances is not helping” in containing the dollar's flight.

"Depleting forex reserves, inflow delay and quieter State Bank of Pakistan are giving jitters to the market. But surging oil prices beyond $110 is disastrous," the Mettis Global report quoted him as saying.

Who will be affected by greeback's flight?

With the dollar rising to uncharted heights, stakeholders warn that a weakening rupee could open up Pakistanis to a second round of inflationary impact, which will hit the lower and middle classes the hardest.

Experts believe that while no sector of the economy would be immune to the fallout from the rupee’s steep devaluation, key areas such as debt servicing and imports for industry and food items will be among the first to be affected.

Topline Securities CEO Mohammad Sohail told Dawn on Tuesday that the common man is always indirectly affected by the fall of the rupee.

“A weaker rupee means costlier imports that increase inflation, which affect the lower and lower-middle class more than the upper-middle class or the very rich,” he said.

In addition, an appreciated dollar raises costs of production, which will have an adverse impact on the competitiveness of the country’s products in the international market.

According to Lucky Motor Corporation Limited Chief Executive Officer Asif Rizvi, an increase in the dollar's value will also lead to a rise in the prices of vehicles and hence, car sales would be severely affected in the future.

Car sales numbers had been showing impressive growth, but “new bookings are facing a sharp decline after the huge hike in interest rates and rising vehicle prices," he said, adding that auto financing may reach zero in the coming months.

Meanwhile, Association of Builders and Developers Chairman Mohsin Sheikhani said the massive fall in the value of the rupee had sent prices of construction materials soaring to an alarming level, hiking up the construction cost of an apartment to Rs 5,500-6,000 per sq ft from Rs 3,000 some three years ago.

Reason for dollar's rise
According to currency dealers, the dollar demand never comes down, which did not allow the local currency to stay at any point.

They say the higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund (IMF) — has further eroded the confidence of stakeholders.

Meanwhile, the decline in the rupee is also fuelled by an uncontrolled increase in imports coupled with a relatively slower pace of growth in exports.

The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72pc, leaving no room for the government to improve its external balance.

Moreover, foreign exchange reserves of the central bank have touched $10.3 billion, lowest since June 2020.

Currency dealers say the unexpectedly high imports bill and low foreign investment were not in support of the exchange rate while over $13bn current account deficit was already there as a challenge for the government.

According to FAP Chairperson Malik Bostan, another reason for the persistent increase in the value of dollar is its overselling.

"Commercial banks are constantly overselling the dollar in the interbank market, which is why it has been appreciating by Rs1-2 every day," he said while speaking to Dawn.com.

Measures to arrest rupee's fall
Given the situation, Prime Minister Shehbaz has directed the policymakers to devise a comprehensive strategy in consultation with the stakeholders to halt the rupee’s free fall and improve reserves.

He has also held meetings with Bostan on that matter, and referring to a meeting on Tuesday, the FAP chairperson told Dawn.com that he had asked the PM to take action against commercial banks in order to put an end to the persistent rise in the value of dollar.

Bostan added that he had also advised the premier that an immediate ban should be placed on the dollar's forward trading and 100pc cash margin on all imports.

Imposing the cash margin, he explained, would lead to a decline in imports and would subsequently reduce pressure on the rupee.

Meanwhile, FAP secretary general Zafar Paracha said the rupee had chances of a rapid recovery if there were "good results" of talks with the IMF in Doha and the international moneylender released a $1 billion tranche, which has been delayed in the aftermath of the stalling of the IMF's programme with Pakistan in April.

Otherwise, he added, the dollar could even breach the Rs200 mark.

Aiming to put an end to the rupee's free fall, the government has held multiple meetings on the matter over the past week and a Dawn report said on Tuesday that this reflected the growing frustration in the power corridors of Islamabad.

DAWN

[shortbread]

Keeping the politics aside, no party/leader in Pakistan right now is capable of taking the painful economic decisions to stop this freefall. If they do, the opposition will rally the people against the incumbents. Make no mistake it will be the same once IK comes back to power post elections. Pakistan's taxation system is simply diabolical and extremely inefficient. The only working taxation mechanism is fuel taxes which attract peoples ire.

Hope and pray the dollar finds resistance at the 200 benchmark. If it breaks that even before the Fed has really started increasing rates, the freefall will be unstoppable!

[wasim-fan]

$ will hit 250 in 2 months if IMF loan doesn't go through and there will be re-elections.