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Dollar gains further ground to near historic high against rupee

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2 years ago

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  • Rupee registers losses for 15th consecutive session.
  • Rupee falls to 239.71 after losing 0.03% in interbank market.
  • Local unit is nearing historic low against dollar.

KARACHI: Registering losses for the 15th consecutive session, the Pakistani rupee lost further ground Thursday as the US dollar neared a historic high.

The rupee fell to 239.71 after losing 0.03%, down in value from the previous session’s close of 239.65, in the interbank market..

The rupee now stands only Rs0.23 short of an all-time low level of Rs239.94 on July 28, 2022.

The rupee, which has been one of the worst performing currencies in the emerging markets, has depreciated by nearly 9% so far this month due to wide-ranging factors.

Analyst Yousuf Rahman at KASB Securities told The News that debt servicing was one of the reasons behind the rupee’s decline as gross financing needs for the year are estimated at $32 billion.

Rahman also noted that floods have forced the government to import vegetables, grains, and cotton to replace damaged crops — increasing the pressure on the rupee.

“This has further added strain on the import bill and there have been news of consistent dollar outflows from grey channels, particularly through the Afghanistan border,” Rahman said.

He said the fundamentals and sentiments for the battered rupee won’t improve until anticipated inflows from friendly countries happen.

“Once additional financing is received from the World Bank, ADB [Asian Development Bank], and allied countries, the rupee may stabilise around the 215 mark,” Rahman added.

The revival of the International Monetary Fund (IMF) bailout programme and the release of a $1.1 billion loan tranche from the Fund last month supported the rupee briefly in late August. However, the currency is again struggling.

“Dollar strength and high commodity prices are impacting regional and major currencies,” said Komal Mansoor, the head of research at Tresmark.

“[The] Indian rupee also traded above 80/dollar this week, and they have spent $90 billion to defend their already stable currency. Yuan, euro, and sterling have all depreciated to multi-year lows,” Mansoor said.

But the local currency hitting new lows is worrisome for the economy because it shows the government’s inability to stabilise forex reserves and reverse negative sentiment, he added.

“Some sort of a two-way direction is crucial for the currency”.

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In interbank trade, the Pakistani rupee beats the US dollar.

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6 days ago

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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7 days ago

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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Business

The inflation rate in Pakistan dropped to its lowest level.

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7 days ago

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On December 2, core inflation as determined by the Consumer Price Index (CPI) significantly slowed, falling to 4.9% in November 2024 from 7.2 percent in October 2024.

The CPI-based inflation rate for the same month last year (November 2023) was 29.2%, according to PBS data.

Compared to a 1.2% gain in the prior month, it increased by 0.5% month over month in November 2024.

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