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Pakistani rupee’s massive gains against dollar to be short-lived: Goldman Sachs

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  • Market will continue to require a premium for Pakistani rupee ahead of elections, says analyst
  • Local currency staged remarkable comeback last month.
  • Appreciation of Pakistani rupee will likely be short-lived.
  • Risk remains amid possibility of unrest ahead of elections.

The recent massive appreciation in the value of Pakistani currency against the US dollar will fizzle out amid financing gaps, Bloomberg quoted Goldman Sachs Group Inc. as saying on Thursday.

The local currency staged a remarkable comeback from its record low earlier last month, becoming the world’s best-performing currency in September due to a crackdown launched by authorities against hoarders and currency smugglers.

“The recent appreciation of the Pakistani rupee will likely be short-lived, given soaring interest costs and only short-term arrangements with the International Monetary Fund and bilateral financing to support the external balance,” Goldman analysts led by Kamakshya Trivedi wrote in a Wednesday report.

“The market will continue to require a premium for Pakistan’s rupee ahead of elections.”

The rupee has surged almost 9% since late August, making it the best performing currency globally after Afghanistan’s afghani, as authorities cracked down on the illegal dollar trade.

But risk remains as investors brace for possible unrest as the nation prepares to hold national elections in the first few months of next year.

Inflows from exports and remittances also remain muted, making the nation more dependent on foreign aid from countries in the Middle East as well as China for dollar flows.

An IMF team is scheduled to visit Pakistan next week to review the nation’s economic performance ahead of a loan disbursement as part of its $3 billion bailout programme.

Analysts believed that the rupee is likely to trade in a narrow range of 275-285 per dollar until at least the next tranche of the IMF’s loan programme is finalised.

According to dealers, the currency recently lost ground against the greenback as a result of an increase in demand for dollars from importers, while exporters’ dollar sales slowed as they expected the rupee to settle at its current levels in the coming days.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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