Business

Pakistan’s bonds rise to highest level in over a year as IMF tranche nears

Published

1 year ago

Farwa

Rise in bonds based on reports of political stability after polls.
2036 dollar-denominated bond gains 2.4 cents.
2025 maturity lifts to strongest level since May 22.

KARACHI: Pakistan bonds rose to their highest level in 15 months in hopes that more international financial support is on the way after the country secures the International Monetary Fund’s (IMF) tranche, The News reported Tuesday.

Optimism about the country’s economy after the tranche has doubled the bonds as they were in late May as the country continues to be gripped by the debt crisis.

The 2036 dollar-denominated bond rallied the most, gaining 2.4 cents to trade at 57.76 cents on the dollar. The 2025 maturity gained just under 2 cents, lifting it to 82.37 cents on the dollar, its strongest level since May 2022.

The latest leg of the rally, which began last month, was sparked by hopes that an election scheduled for February will provide political stability and enable some economic certainty. An agreement last week to unlock $700 million of IMF funding has also buoyed the country’s bonds.

Meanwhile, the lost some of its trade competitiveness in October as it appreciated against a basket of major trading partners’ currencies, data from the central bank showed.

The Real Effective Exchange Rate (REER) index, which measures the value of the rupee against a weighted average of several foreign currencies, rose to 98.6 in October from 91.7 in September, according to the State Bank of Pakistan (SBP).

A REER below 100 indicates that the country’s exports are cheaper and imports are more expensive, giving it an edge in international trade. A higher REER means the opposite. The REER increased 7.51% month-on-month in October but declined 2.9% year-on-year when it stood at 101.57.

The Nominal Effective Exchange Rate (NEER) index, which measures the value of the rupee against the same basket of currencies without adjusting for inflation, also increased 6.5% month-on-month in October to 39.18 from 36.79 in September. The NEER fell 21.46% year-on-year from 49.89 in October 2022.

The REER and NEER are calculated using the trade weights of 37 countries, which account for 90% of Pakistan’s trade flows. The rupee continued to rise against the dollar on Monday due to exporters’ dollar sales and optimism about the country’s economy following Pakistan’s deal with the global lender for the next loan tranche.

In the interbank market, the rupee closed at 285.97 to the dollar, compared with the previous close of 286.50. The local unit increased by 0.19% against the dollar during the session. The local currency gained 75 versus the greenback in the open market.

According to rates released by the Exchange Companies Association of Pakistan (ECAP), the rupee was trading at 287.50 for selling, compared with 288.25 on Friday.

“Despite the drop in forward premiums, exporters are returning to the market to sell dollars, hoping that the rupee will strengthen further in the coming days,” said a currency dealer. The rupee is supported by better supply and an improved economic outlook, the dealer added.

The currency market prediction is that the rupee will rise to approximately 282 per dollar, at which point the SBP will recommence purchasing dollars. The rupee will remain strong due to positive news flows such as multilateral funding and IMF executive board approvals, according to a dealer.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

2 days ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

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

Published

1 week ago

Farwa

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.

Business

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

Published

1 week ago

Farwa

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.