Rupee hits one year’s highest | Express Tribune

KARACHI:

The Pakistani the currency reached a one-year high of Rs157.84 against the US dollar on the interbank market on Tuesday as the inflow of foreign currencies were still high compared to their outflow, according to foreign exchange market experts.

In addition, gold lost its luster at a one-year low of Rs 107,200 per tonne (11.66 grams) in line with the downward trend in the global market. With a gain of Rs0.19 on Tuesday, the rupee was close to the March 2020 level of Rs157.44.

It closed at Rs158.03 on Monday, according to the State Bank of Pakistan (SBP). The support for the rupee came from the decline in oil prices on the world market.

The fall in oil prices gives a signal to the interbank market that Pakistan will not demand large amounts of dollars to pay for oil imports.

“The rupee could peak at around Rs155 against the US dollar over the next month,” said Exchange Companies Association of Pakistan (ECAP) secretary general Zafar Paracha as he spoke to The Express Tribune.

However, the rupee may not stay around Rs155 for long because a stronger local currency would deter the country’s exports, he said. Topline Securities Chief Executive Officer Muhammad Sohail said that the receipt of higher transfers of workers and smaller (international) travel helped the rupee maintain its trend towards the greenback.

Alpha Beta Core CEO Khurram Schehzad said the rupee had recovered 6.4%, or Rs10.58, since reaching a record high of Rs168.43 on August 26, 2020. The rupee’s advance has reduced the country’s debt burden by Rs1.16 trillion.

In addition, the trend should help control imported inflation, as Pakistan is heavily dependent on imports of raw materials, machinery and food. However, the growth of the rupee could make the country’s exports uncomfortable in the international market, he said.

At the end of last week, Pakistan signed a new agreement with Qatar for imports of liquefied natural gas (LNG) at a comparatively lower price compared to the previous agreement with Qatargas.

The new agreement is expected to help Pakistan save $ 3 billion over a ten-year period, beginning in 2022.

In addition, the International Islamic Trade Finance Corporation (ITFC) – a subsidiary of the Islamic Development Bank Group – extended $ 1.1 billion in funding to Pakistan last week for oil and gas imports in 2021.

The two oil and gas imports offered supported the strength of the rupee against the US dollar.

“The continuous inflow of foreign currencies through the Roshan Digital Account (RDA) … from overseas Pakistanis has helped the rupee gain ground as the inflows have stabilized the country’s foreign exchange reserves at around 13 months’ highest level of $ 13 billion,” Paracha said.

Encouraging remarks by the Financial Action Task Force (FATF) that Pakistan had improved compliance with anti-money laundering (AML) and anti-terrorist financing (CTF) recommendations also supported the rupee, he said.

The resumption of the IMF’s $ 6 billion loan program also helped the rupee gain momentum against foreign currencies, ECAP President Malik Bostan said the other day.

“The IMF has expressed satisfaction with the economic reforms that Pakistan implemented in the latest review of the loan program … despite the Covid-19 pandemic. The lending institution will release the next $ 500 million loan tranche after mid-March, he said.

In addition, the rupee lifted the postponement of G20 foreign debt repayment until June 2021 and the $ 2 billion asset from Saudi Arabia and the United Arab Emirates in Pakistan’s foreign exchange reserves for another year. Pakistan has also announced plans to raise $ 750 million to $ 1 billion through floating international bonds next month.

Gold loses luster Gold lost 1,050 Rs to 107,200 Rs per tola in a row after the global commodity lost $ 13.10 per ounce (31.10 grams) to close at $ 1730 on Tuesday.

“Gold has maintained a downward trend in world markets since US President Joe Biden announced a new $ 2 trillion stimulus package to support its economy recently,” said Abdullah Abdul Razak, a member of the Sindh Saraf Jewelers Association (ASSJA). .

In addition, the roll-out of Covid19 vaccine and the resumption of global economies from partial lockdown have also reduced the demand for gold globally.

“China, which was previously the single largest buyer of gold, has stopped buying the product these days,” he said.

ASSIA President Haji Haroon Chand added that global political tensions have eased since Biden’s arrival at the White House. The gradual return of peace around the world reduced global demand for gold as stock and oil markets resumed.

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