Business
Bitcoin surges $80,000 on cheap dollar, debasement worries drive momentum
Bitcoin rose above $80,000 to hit a more than three-month high on Tuesday as a soft US dollar, in the wake of the moves by Treasury Secretary Scott Bessent to calm the bond market, revived momentum in the crypto sector.
US President Donald Trump last week called on Congress to pass a bill that would bring clearer definitions to the growing cryptocurrency sector. Since then, bitcoin, the world’s largest cryptocurrency, has risen 16 per cent.
It was last at $80,323.24 in Asian hours, having earlier touched $81,237.94, its highest level since mid-May. Bitcoin is up 28pc so far in August, set for its biggest monthly gain since November 2024.
Cryptocurrencies also got a big boost after the US Treasury last week unveiled plans to buy back more long-dated bonds to help cap the gains in the long-end yields, a move that has led to the US dollar bearing the brunt of investor angst.
Tim Sun, senior researcher at HashKey Group, said Bessent’s messaging has reinforced the market’s view that, at least through the midterm elections, US policymakers may have a lower tolerance for a further rise in long-end yields.
“That would create a relatively supportive macro backdrop for assets such as bitcoin and gold,” Sun said.
Gold has been the other beneficiary of the dollar weakness, rising to a three-month high.
The Treasury announcement is “exactly the type of thing bitcoin loves”, Geoff Kendrick, global head of digital assets research at Standard Chartered, said in a note last week, adding that bitcoin was built to allow investors a way to avoid this type of intervention.
The action stoked increased chatter around the so-called debasement trade, where the moves to prevent long-end yields from reaching market-clearing levels via buybacks lead the pressure to shift from the bond market to the currency market.
“This (Treasury announcement) prompted buyers to scramble into physical and digital assets as debasement trade fears re-emerged,” said Tony Sycamore, market analyst at IG.
“A sustained break above here would open the door for a move towards $95,000 and $100,000.”
Business
Nine companies prequalified for GEPCO privatisation
The Privatisation Commission Board has shortlisted nine companies to take over 51% to 100% of the shares and control of Gujranwala Electric Power Company (GEPCO).
This decision was made during a meeting of the Privatisation Commission Board, led by Prime Minister’s Adviser Muhammad Ali, where the progress on GEPCO’s privatisation and other state-owned companies was discussed.
The board received 11 applications for GEPCO’s privatisation, and nine of them were approved to move forward.
The companies that made it through the first round include Aktor Electric and Genvira Energy from Türkiye, and Engro Energy, Hub Power, Sapphire, Shirazi Investments, Artistic Milliners, and AKD Securities from Pakistan.
K-Electric officially pulled out of the bidding, and Al-Sharif Contracting did not submit the required paperwork.
The Privatisation Commission said the nine approved companies will now start the due diligence process using a virtual data room.
The meeting also looked at the progress on outsourcing Islamabad, Karachi, and Lahore airports.
The board agreed to reorganize the team handling the airport outsourcing deals.
Additionally, the board has decided to speed up the privatisation of Zarai Taraqiati Bank Limited (ZTBL) and the House Building Finance Company Limited (HBFCL), asking advisers to work quickly on these deals.
A spokesperson from the Privatisation Commission stated that all privatisation deals will be handled in a fair, competitive, and professional way.
Business
IMF talks likely to clear way for 1.2 billion dollar tranche
Ongoing talks between Pakistan and the International Monetary Fund (IMF) are likely to end this week, which might lead to a staff-level agreement and the release of about $1.2 billion, according to officials from the Finance Ministry.
The discussions have centered around Pakistan’s economic performance and how well the country is meeting important goals set by the IMF program.
Officials said the IMF is happy with Pakistan’s foreign exchange reserves and liked the performance of the Federal Board of Revenue in reaching its revenue targets during the July-September period.
Meeting the tax collection target was called a major achievement for the first quarter of the current financial year, according to the sources.
Both sides also talked about a plan to start a fixed tax system for farmers by the end of the current financial year.
The State Bank of Pakistan shared details with the IMF team about steps taken to keep foreign exchange reserves stable and reduce inflation.
The central bank told the delegation that foreign exchange reserves are at $21.4 billion, and commercial banks hold an additional $5.4 billion, the sources added.
The IMF delegation is set to give Pakistan’s economic team a draft of the Memorandum of Economic and Financial Policies (MEFP).
Reaching an agreement on the MEFP would help move forward with a staff-level agreement, which could lead to the release of a $1.2 billion funding amount, the sources said.
Business
Oil rises after Houthis claim attack on Saudi Aramco facilities
After the Iran-aligned Houthi rebels in Yemen claimed to have attacked Saudi Aramco, the kingdom’s state oil corporation, the price of oil increased internationally.
On October 4, Reuters reported that the Houthis claimed to have fired drones and ballistic missiles targeting Aramco installations in the Khurais region and in Riyadh, the Saudi capital.
Prices increased due to worries that Saudi Arabia, one of the main exporters of crude in the Middle East, would experience production disruptions.
Brent crude futures were up 81 cents, or 0.79%, at $103.06 per barrel as of 10:02 p.m. GMT. West Texas Intermediate crude futures in the United States increased by 46 cents, or 0.50%, to $91.57 per barrel.
One of Saudi Arabia’s primary oil-producing regions is Khurais, which the Houthis designated as a target.
Whether the attack actually damaged any infrastructure or interfered with the production of crude oil was not immediately apparent.
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