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

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1 year ago

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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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Business

Issues Affecting Pakistan’s Textile Mills Industry: The Government Is Determined To Address Textile Industry Concerns: FM

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3 days ago

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Muhammad Aurangzeb, minister of finance, has stated that the government is firmly committed to helping the textile industry in every way possible.
He made this pledge today in Islamabad during a meeting with the All Pakistan Textile Mills Association’s leadership.
In order to guarantee the long-term sustainability and future expansion of Pakistan’s industrial sector, the Minister also reaffirmed the government’s commitment to addressing important tax, energy, and funding challenges.
He welcomed the APTMA office-bearers and gave the delegation his word that the government is committed to resolving the issues facing the textile industry since it understands how important it is to Pakistan’s economy.
Muhammad Aurangzeb underlined that resolving the fundamental issues facing the sector is essential to establishing an atmosphere that is favorable for industrial expansion, promoting economic stability, and bolstering the country’s overall growth trajectory.

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As the MPC meeting draws closer, stocks rise.

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3 days ago

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On the final working day of trading, the Pakistan Stock Exchange (PSX) maintained its optimistic trend.

After rising more than 900 points, the benchmark KSE-100 index stabilized around 114,684 points.

The forthcoming Monetary Policy Committee (MPC) meeting on March 10 is allegedly connected to the bullish trend.

Recall that the KSE-100 index gained over 1,400 points on Thursday before closing at 113,713 points.

The greenback, on the other hand, dropped Rs0.07, from Rs279.82 to Rs279.75.

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FBR to Enhance Revenues: Enacts Significant Reforms, Attains Record Revenue Collection

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4 days ago

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The Federal Board of Revenue has effectively executed significant reforms in the past year, enhancing tax administration, compliance, and digital transformation under the leadership of Prime Minister Shehbaz Sharif.
The FBR implemented AI-driven risk identification algorithms to improve tax audits and introduced a customer relationship management dashboard for real-time compliance monitoring.
Moreover, AI-driven Customs Intelligence and digital invoicing systems have transformed tax collection and customs operations.
The implementation of faceless customs assessment has markedly diminished clearance waits, optimizing international trade.
The unified sales tax return has streamlined the tax filing procedure, while the continuous advancement of a tier-3 data center seeks to enhance data security and AI-driven surveillance.
To enhance transparency, the FBR digitized its litigation management system for faster dispute resolution.

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