Business

Rupee plunges to record low of 301 against US dollar

Published

1 year ago

Farwa

Rupee trades at Rs314 against dollar in open market.
The local currency loses Rs0.78 on Friday.
It closed at 300.22 against greenback yesterday.

KARACHI: The Pakistani rupee ended the week on a negative note at a record closing low of 301 against the US dollar in the interbank market, data from the State Bank of Pakistan (SBP) showed.

The local currency is at an all-time low following an easing in import restrictions that has increased the greenback’s demand and rising risks associated with financing the country’s current account deficit.

According to the Exchange Companies Association of Pakistan (ECAP), the local unit is trading at Rs314 in the open market taking the difference between the interbank and kerb rates to Rs13.

According to data issued by the central bank, the local unit lost Rs0.78 or 0.26%, down from yesterday’s (Thursday) close of 300.22.

Interbank closing #ExchangeRate for todayhttps://t.co/xCR6VJ7vBa #SBPExchangeRate pic.twitter.com/1fBMOrsMOs
— SBP (@StateBank_Pak) August 25, 2023

The rupee has lost Rs12.51 in the interbank market since the formation of the caretaker government which is tasked with overseeing at least one review of the International Monetary Fund (IMF) $3 billion standby arrangement; and steering the country through to a national election that is in theory due to take place by November.

Economic expert and former adviser to finance minister Dr Khaqan Najeeb told Geo.tv that pressure from the release of already parked containers and dropping exports and remittances are causing a dollar liquidity crunch in the economy.

The interbank market, he said, is also trying to catch up with the kerb market as Pakistan has agreed to a structural benchmark with the International Monetary Fund of keeping the two markets with a difference which can not be more the 1.25% on the average in five days.

“The open markets are also supply constrained but the demand stays high because the part of imports that are not fulfilled by the interbank market are also taken care of at the kerb market and because of the dollarisation because many people tend to feel that dollar is a storer value and best to hold.”

The expert also pointed out that the monetary policy has fallen behind in creating an impact on people wanting to hold the rupee as well.

He added that inflows have to increase at the interbank level which is the best way to ensure that the Pakistan rupee tends to stabilise

“Also the certainty on the economic plan and the future planned inflows will also help as the next tranche may not be due in the coming months,” he said.

Business

The NORINCO Group is invited by CM Sindh to explore opportunities.

Published

13 hours ago

Farwa

Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.

Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.

With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.

Business

A deal with Pakistan to fight financial crimes has been approved by the Saudi cabinet.

Published

13 hours ago

Farwa

In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).

Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.

The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.

The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.

According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”

The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.

Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.