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Category: Money & Banking

Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.

  • Rupee falls Rs4.37 to dollar in fresh wave

    Rupee falls Rs4.37 to dollar in fresh wave

    KARACHI: The Pakistan Rupee (PKR) has lost Rs4.37 to the dollar during last three straight days on Wednesday.

    The rupee fell by Rs1.48 to the dollar on Wednesday to close at Rs185.92 as compared with previous day’s closing of Rs184.44 in the interbank foreign exchange market.

    READ MORE: Dollar climbs up to Rs184.44 at interbank closing

    The rupee lost around Rs4.37 against the dollar during past three trading sessions after making a sharp recovery to Rs181.55 on April 16, 2022. It is pertinent to mention that the local currency made this recovery after touching all-time low at Rs188.18 on April 07, 2022.

    The fresh wave of rupee depreciation has been attributed to import and external debt payments.

    The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

  • Dollar makes sharp midday gain to reach PKR 186

    Dollar makes sharp midday gain to reach PKR 186

    KARACHI: The US dollar made a sharp gain against the Pakistan Rupee (PKR) to reach Rs186 during midday trading at interbank foreign exchange market.

    The dollar gained around Rs1.56 to reach Rs186 during the midday trading against the last day’s closing of Rs184.44 in the interbank foreign exchange market.

    READ MORE: Dollar climbs up to Rs184.44 at interbank closing

    Currency analysts said that due to import and external debt payments the local currency was under severe pressure.

    The recent measures of the State Bank of Pakistan (SBP), including raising the key policy rate by 2.5 per cent, have failed to support the local currency.

    The fresh wave of rupee depreciation may be attributed to higher demand of the foreign currency for external debt repayment.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    The appreciation in dollar value may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

  • Dollar climbs up to Rs184.44 at interbank closing

    Dollar climbs up to Rs184.44 at interbank closing

    KARACHI: The Pakistan Rupee (PKR) fell sharply against the dollar on Tuesday and ended at Rs184.44 in the interbank foreign exchange market.

    The local currency fell by Rs1.9 to end at Rs184.44 to the dollar from previous day’s closing of Rs182.54 in the interbank foreign exchange market.

    It was second straight day when the rupee declined sharply against the greenback. The local currency deteriorated by Rs2.89 against the dollar.

    The fresh wave of rupee depreciation may be attributed to higher demand of the foreign currency for external debt repayment.

    Previously, the rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    The rebound in dollar value on Monday may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

  • PKR falls sharply by Rs2.26 to dollar in interbank midday trading

    PKR falls sharply by Rs2.26 to dollar in interbank midday trading

    KARACHI: The Pakistan Rupee (PKR) fell sharply by Rs2.26 against the US dollar on Tuesday during midday trading at interbank foreign exchange market.

    The dollar is currently trading at Rs184.80 from last day’s closing of Rs182.54 in interbank foreign exchange market.

    READ MORE: Dollar ends PKR recovery spree; closes at Rs182.54

    The rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    The rebound in dollar value on Monday may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

  • Bank Alfalah, Paymob collaborate for digital payments

    Bank Alfalah, Paymob collaborate for digital payments

    KARACHI: Bank Alfalah Limited and Paymob, MENA’s market-leading digital payments provider have collaborated to activate and support merchant acquisition and integration services across Pakistan.

    (more…)
  • Sri Lankan default impact on Pakistani banks

    Sri Lankan default impact on Pakistani banks

    KARACHI: Pakistani banks operating in Sri Lanka will have adverse effect on their books due to declaration of Sri Lanka for failure to repay its foreign debt.

    In a recent development, Sri Lanka announced that it would be defaulting on its external obligations due to dwindling foreign exchange reserves.

    Sri Lanka’s total external debt currently stands at $51 billion, i.e. 60 per cent of GDP.

    As per foreign news agency, Sri-Lanka has to make a foreign repayment of $4 billion, including $1 billion sovereign bond maturing in July 2022.

    Insight Securities said that its banking universe including UBL, MCB, HBL, and BAHL holds Sri Lanka sovereign instruments in their investment book (both USD denominated & Local currency), may result in revaluation loss or provision charge.

    Sri-Lanka’s central bank governor said that this suspension of payment would be placed until the country reaches an agreement with creditors and alongside with the International Monetary Fund (IMF).

    The analysts believed that this declaration of default will only affect USD denominated bonds while the CBSL (Central bank of Sri Lanka) will continue to honor domestic bonds i.e. T-bills. However, disclosure of local and USD-denominated sovereign bonds is not available in respective banks financials.

    It is worth mentioning that these above abstracts are based on the CY21 financial statement, and there is a possibility that these banks have already reduced their exposure before the default announcement.

    Analysts at Arif Habib Limited said that the economic crisis in Sri Lanka seems to be worsening with the authorities announcing temporarily default on its foreign debts.

    With more than $50 billion in external debt and foreign exchange reserves hovering around $1.9 billion (last month), the country is currently struggling to make payments on its international sovereign bonds.

    Media sources suggest, this week $36 million interest payment is due on a Sri-Lanka’s 2023 dollar bond as well as $42.2 million on 2028 note.

    Moreover, a $1 billion sovereign bond is maturing on July 25th, 2022.

    The extraordinary measure taken by the Sri-Lankan authorities to halt payments on foreign debt is to preserve its dwindling reserves for the purpose of importation of essentials such as food, fuel and medicine.

    Going forward, the analysts believe, the options available to the Sri-Lankan government include: negotiation of a settlement in which bondholders are given new bonds that are worth less but help provide some partial compensation, or restructuring of the current one with the support of IMF which media sources claim to be likely Sri Lanka’s strategy.

    It is pertinent to note here that some of the Pakistani banks are exposed to the Sri-Lankan economy either through branch banking or investments in the government debt securities.

    Amongst our AHL coverage banks, MCB has eight branches in the Lankan territory while HBL operates with three branches in the country.

  • Dollar ends PKR recovery spree; closes at Rs182.54

    Dollar ends PKR recovery spree; closes at Rs182.54

    KARACHI: The US dollar on Monday ended gaining spree of the Pakistan Rupee (PKR) and rebounded with a gain of 99 paisas.

    The rupee ended Rs182.54 to the dollar from previous last Saturday’s closing of Rs181.55 in the interbank foreign exchange market.

    READ MORE: Dollar plummets against PKR for seven consecutive days

    The rupee made significant recovery for seven consecutive trading sessions after the central bank announced a sharp increase in key policy rate.

    The SBP on April 07, 2022 announced 2.5 per cent increase in interest rate to enhance the key policy rate to 12.25 per cent from 9.75 per cent. The rupee was at all-time low Rs188.18 to the dollar on the day of monetary policy announcement.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    However, following the announcement the rupee rallied for seven straight days and recovered Rs6.63 against the dollar.

    The rebound in dollar value on Monday may be attributed to the further depletion in foreign exchange reserves of the county.

    Pakistan’s foreign exchange reserves hit a 22-month low after falling for nine consecutive weeks to $17.03 billion.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

    According to data released by the State Bank of Pakistan (SBP), the foreign exchange reserves of the country fell by $449 million to $17.028 billion by week ended April 08, 2022 as compared with $17.477 billion a week ago.

    The foreign exchange reserves were at $17.971 billion by week ended June 26, 2020.

    READ MORE: Rupee continues recovery to dollar for 4th straight day

    Pakistan’s foreign exchange reserves have declined by $10.23 billion in the past seven months owing to extreme pressure of dollar demand for import payments and external repayment of government debt.

    The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021.

  • NBP approves Rs1.5 billion for Waves Housing Project

    NBP approves Rs1.5 billion for Waves Housing Project

    KARACHI: National Bank of Pakistan (NBP) has approved an amount of Rs1.5 billion to kick start the affordable housing project being developed by Waves Singer Pakistan Limited, a statement said on Monday.

    A signing ceremony between NBP and Waves was held in Lahore. With a commitment of Rs1.5 billion, NBP will be one of the largest financiers of the project.

    NBP is also the mandated lead advisor and arranger for the upcoming syndicated finance facility to further develop the project.

    This financing represents the active role NBP is playing to support the development of real estate sector in Pakistan.

    Waves has been prominent player in the home appliance market of Pakistan for almost five decades and is now venturing into real estate sector. This financing will kick start the development of housing project.

    The state of the art project is being launched under brand name “Waves Enclave” and will target affordable housing segment of the market with an inventory of more than 1,000 apartments.

    This will be located at the entrance of Lahore between Thokar Niaz Baig and Allama Iqbal Town on the main Orange Metro Line.

    Top of the line architects and consultants have been hired for the project and it is in the process of required approvals.

    Its formal launch is expected in later half this year.

  • Dollar plummets against PKR for seven consecutive days

    Dollar plummets against PKR for seven consecutive days

    KARACHI: The US dollar plummeted against the Pakistan Rupee (PKR) for the last seven consecutive trading sessions on Saturday.

    The foreign currency is losing value to the local currency since sharp increase in policy rate announced on April 07, 2022.

    READ MORE: Dollar retreats for 6th straight day; falls to Rs181.58

    The exchange rate ended at Rs181.55 to the dollar on Saturday as compared with previous day’s closing of Rs181.58 in the interbank foreign exchange market.

    The local currency has made sharp recovery against the dollar since the significant raise was announced in the policy rate on April 07, 2022.

    The State Bank of Pakistan (SBP) announced an unprecedented increase in policy rate by 250 basis points to 12.25 per cent. The massive rise in interest rate surprised the market and trade and industry are in state of shock. The massive hike in policy rate also resulted in a sudden decline in demand for dollar.

    READ MORE: Rupee up 13 paisas to continue recovery against dollar

    This is the reason behind five consecutive gain in rupee value during past five trading sessions.

    The rupee hit all-time low of Rs188.18 to the dollar on April 07, 2022. Since then the rupee recovered Rs6.63 against the dollar during past six straight trading sessions.

    The SBP noted that the recent developments necessitated a strong and proactive policy response.

    Accordingly, the Monetary Policy Committee (MPC) decided at its emergency meeting today, to raise the policy rate by 250 basis points to 12.25 percent.

    READ MORE: Rupee continues recovery to dollar for 4th straight day

    This increases forward-looking real interest rates (defined as the policy rate less expected inflation) to mildly positive territory. The MPC was of the view that this action would help to safeguard external and price stability.

    The MPC also noted that SBP is in the process of taking further actions to reduce pressures on inflation and the current account, namely an increase in the interest rate on the export refinance scheme (EFS) and widening the set of import items subject to cash margin requirements. These items are mostly finished goods including luxury items and exclude raw materials.

    The announcement of these measures is expected soon and will complement the action taken by the MPC on interest rates.

    READ MORE: Rupee makes recovery to dollar for third straight day

  • E-banking transactions up 23% in Jul-Dec: SBP

    E-banking transactions up 23% in Jul-Dec: SBP

    KARACHI: The e-banking based transactions have increased by 23 per cent to Rs33.38 trillion during the quarters of October – December 202 as compared with Rs27.19 trillion in the previous quarter (July – September 2021), the State Bank of Pakistan (SBP) said on Friday.

    The SBP issued quarterly report stating that the volume of e-banking recorded 10.7 per cent to 400 million transactions as compared with previous quarter of 361.6 million.

    READ MORE: Banks approve Rs180 bn for low-cost housing loans

    E-banking includes transactions conducted via electronic channels including real-time online Branches, ATMs, mobile banking, internet banking, call center banking, POS and e-Commerce.

    It would be pertinent to note that the growth in e-banking transactions is much steeper relative to paper based transactions, albeit the value of transactions is higher in the case of later.

    The volume and value of paper based transactions increased by 3.4 per cent and 12.2 per cent respectively.

    READ MORE: Banks approve housing loans worth Rs7.4 billion in event

    While the volume of e-banking transactions is almost four times higher at 400 million than paper based transactions at 101.4 million, the value of transactions of the former stands at Rs33.4 trillion compared with Rs41.6 trillion paper based transactions.

    All around growth in e-banking included expansion in both mobile and internet banking with a double-digit increase in value and volume of transactions during the second quarter. The number of mobile banking transactions amounted to 94 million, while the value reached Rs2.2 trillion, which comes to 18.8 per cent and 35.4 per cent growth respectively on QoQ basis. Meanwhile, number of mobile banking users grew by 5 per cent on QoQ basis, reaching a total of 11.9 million users. The internet banking users reached 6.9 million, conducting 33.8 million transactions, amounting to Rs2.4 trillion, which translate to a strong 13.9 per cent progress in terms of volume and 28 per cent increase in the value of these transactions compared to preceding quarter.

    READ MORE: Financing for Mera Pakistan Mera Ghar gains momentum

    Retail sector also continued its upswing in adoption of digital payments. During the quarter, a total of 31.4 million transactions amounting to Rs178.1 billion were processed via 92,153 Point-of-Sale (POS) terminals. This shows an impressive double-digit QoQ growth of 11.8 per cent by volume and 32.1 per cent by value. Similarly, the number of e-Commerce merchants also increased by 32.6 per cent reaching a total of 3,968. Onboarding of QR merchants largely added to this growth. These merchants processed 13.6 million transactions worth Rs26.7 billion, showing QoQ growth of 7.2 per cent by volume and 19.8 per cent by value.

    READ MORE: State Bank amends regulations for housing loans

    As of end-December 2022, there were 5.4 per cent more cards than the preceding quarter, reaching 48.6 million cards in circulation which mainly comprised of Debit Cards (63.5 per cent), Social Welfare Cards (22.8 per cent), ATM only Cards (9.9 per cent), Credit Cards (3.6 per cent), and Prepaid Cards (0.3 per cent). During this quarter, paper based transactions showed relatively slower growth of 3.4 per cent in volume and 12.2 per cent in value on QoQ basis. In Large-value (wholesale) payments segment, SBP’s Real-time Inter-Bank Settlement Mechanism (PRISM) processed a total of 1.1 million transactions amounting to Rs161.3 trillion, showing QoQ growth of 5.9 per cent in volume and 1.4 per cent in value.