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Rupee continues recovery against dollar on hopes of IMF deal within few days

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2 years ago

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The rupee gained further ground against the US dollar as Pakistan was able to secure $500 million from the Industrial and Commercial Bank of China (ICBC) and the expectation of striking a deal with the International Monetary Fund (IMF).

The local currency gained by Rs3.46 against the greenback in the interbank market during the intraday trade. The local unit was seen changing hands 275 at around 11:47pm. 

The rupee closed the week on Friday by gaining significant ground against the US dollar. According to the State Bank of Pakistan (SBP), it appreciated by Rs6.63, or 2.38% in the interbank market and closed at 278.46. 

Speaking to Geo.tv, Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha citing a few reasons for the earlier dollar appreciation said that the hype was created by the country’s financial institutions and international players that manipulated and caused the rates to increase. 

“Currently, the dollar decreased against the rupee due to the market correction and it is still in the ebb and flow.  Financial credentials cannot be changed in one day which can cause the currency to depreciate or appreciate at such a scale,” said Paracha.

The destabilised currency damages Pakistan’s image and foreign direct investment (FDI) and local investors are discouraged due to this reason, he added.  

He anticipated that keeping in view the IMF agreement and the inflows from the friendly countries, the dollar should remain in the range of 260 to 265. 

Paracha also mentioned that the political condition of Pakistan has been impacting the dollar rates which never had happened before. This time we are on the very weaker side that’s why IMF is also pushing us, he noted. 

He also highlighted that the financial conditions are not bad as it is being indicated. Our inflow is $50 billion and our outflow is $60 billion, he said, adding that Pakistan requires $10 to 15 billion which has been halted. 

“If we had managed it well, reducing our expenditures and the subsidies of $17.4 billion which the government gives to our elites then it would make a huge impact”, he maintained. 

There is a very dire need of increasing our tax base, not the tax rate. No one except the salaried class and big companies pay the tax. Therefore, the government need to increase the tax base, he concluded.

Earlier today, a government official expressed hope of striking a deal with the Washington-based lender. 

Another official assured that Pakistan was expecting to strike the staff-level agreement (SLA) with the IMF in the next few days, however, the Fund was reluctant to give any time frame for finalising the agreement.

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Robust activity lets PSX climb above 115,000 level again.

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5 months ago

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

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Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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5 months ago

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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