Business

Rupee to recover against dollar as Pakistan gets ready to seal IMF deal

Published

2 years ago

Farwa

Govt serious about taking prior actions to sign SLA.
Rupee gains 2.18% against dollar this week.
Market remains hopeful that IMF agreement will proceed.

KARACHI: The rupee is expected to start its recovery drive against the US dollar as the government’s efforts to secure the International Monetary Fund’s (IMF) bailout programme has boosted the market’s positive sentiments and due to an increase in dollar supply, The News reported Sunday citing traders and analysts.

The government seems serious about taking some prior actions that could help meet the IMF conditions to seal the state-level agreement with the global lender.

During the outgoing week, the local currency gained about 2.18% against the greenback in the interbank market, raising from 275.30 on Monday to 269.28 on Friday.

Although no agreement to unlock the funds from a $6.5 billion bailout was achieved between Islamabad and the IMF during the fund’s 10-day visit, both parties concurred to continue long negotiations because the South Asian nation’s worsening economic crisis does not appear to have a quick resolution.

Pakistan must come to an agreement with the IMF for further money to secure more aid, avoid default, and rebuild foreign currency reserves that have decreased to $2.9 billion.

The stock market embarked on a selling binge, but there was no reaction to both sides’ failure to reach a staff-level accord. It increases the IMF timeframe by at least another 10–12 days and, given the rate at which reserves are depleting, constitutes a serious concern.

Despite a setback, the market remains hopeful that the IMF agreement will proceed, particularly given the several harsh “prior actions” Pakistan has already done.

“As the IMF needs to see some progress on the terms, the staff-level agreement (SLA) is still not in place. In about a week, the SLA might be signed and then sent to the IMF board for final approval. Overall, progress that is good,” said a currency dealer.

A positive effect is happening in the currency market by the exporters, due to dual movement in the currency, who are realising export proceeds, and providing much-needed liquidity in the market, according to Tresmark’s client note.

“For the first time in many months, the market also witnessed material selling in the forward tenors by exporters. In the grey market the last quote was 280/282 and there is some panic there as well as speculators want to book their profits and exit the market,” it said.

There was still a substantial backlog of imports and payments, which would exceed any inflow of export proceeds. But in the medium term, and given that the IMF agreement would go ahead with follow-up from friendly countries and multilateral institutions, demand might go to take a huge hit, it added.

“With that, entities involved in the export business will see a boom where as those in the import business will witness a bust. In the short term the market may stay above the 270/$ level, but may fall back to 262/$ level in the medium term,” the client note stated.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

14 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

14 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.