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.
KARACHI: State Bank of Pakistan (SBP) on Monday directed all banks to operate their branches with bare minimum staff during measures taken by the authorities to fight against coronavirus.
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KARACHI: The Pak Rupee ended down by 10 paisas against dollar on Friday owing to higher demand of the foreign currency for import payment.
The rupee ended Rs158.67 to the dollar from previous day’s closing of Rs158.57 in interbank foreign exchange market.
Currency dealers said that the higher demand for dollars depressed the rupee value. They said that the higher dollar demand was due to import of Ramazan related commodities.
The exchange rate in open market witnessed some changes in rupee value. The buying and selling of dollar was recorded at Rs158.00/Rs158.50 from previous day’s closing of Rs157.50/Rs158.50 in cash ready market.
KARACHI: The Pak Rupee fell by five paisas against dollar on Thursday due to rise in demand for import payment.
The rupee ended Rs158.57 to the dollar from previous day’s closing of R$158.52 in interbank foreign exchange market.
Currency dealers said that rise in demand for import payment depreciated the local currency. They said that majority of dollar demand was for the payment of imported commodities related to holy month of Ramazan.
The exchange rate in open market was remained unchanged. The dollar buying and selling was recorded at Rs157.50/Rs158.50, the same previous day’s closing, in cash ready market.
KARACHI: The Pak Rupee ended down by 10 paisas against dollar on Wednesday due to higher import payment demand.
The rupee closed at Rs158.52 to the dollar from previous day’s closing of Rs158.42 in interbank foreign exchange market.
Currency dealers said that the rupee fell due to rise in demand for import payment.
They said that the importers were holding the dollar purchase on expectation of major cut in key policy rate.
The foreign currency market was initiated in the range of Rs158.10 and Rs158.40. The market recorded day high Rs158.85 and low of Rs158.40.
The exchange rate in open market was remained unchanged. The dollar buying and selling was recorded at Rs157.50/Rs158.50, the same previous day’s closing, in cash ready market.
KARACHI: State Bank of Pakistan (SBP) on Tuesday announced a refinancing scheme for combating coronavirus. The size of the scheme is Rs5 billion and available for end-user at three percent.
Dr. Reza Baqir, SBP governor, announced the scheme namely “Refinance Facility for Combating COVID–19 (RFCC)” and its Shariah compliant version to support hospitals and medical centers in combating the spread of COVID–19.
Under this scheme, the SBP will refinance banks to provide financing at a maximum end-user rate of 3 percent for 5 years for the purchase of equipment to detect, contain and treat the coronavirus.
The SBP will provide this facility to banks at zero percent.
All hospitals and medical centers registered with federal or provincial health agencies and which are engaged in the control and eradication of COVID-19 will be eligible for this facility.
The total size of the scheme is Rs 5 billion, with a maximum financing limit per hospital or medical center of Rs 200 million.
This scheme will help contain the spread of the Coronavirus and reduce its human toll. It is available until end-September 2020.
The SBP governor said that considering the necessity and success of the scheme the size of the scheme could be enhanced.
He said that the medical institutions and banks had jointly conducted survey for the purchase of ventilators, which was primary need to fight against coronavirus.
KARACHI: Analysts have said that the policy rate cut by 75 basis points by the State Bank of Pakistan (SBP) is below the street expectations.
The central bank in its Monetary Policy Statement (MPS) has cut Policy Rate by 0.75 percent to 12.5 percent – lower-than-our expectations of 1.0 percent, analysts at Topline Securities said.
While the latest move by SBP follows aggressive emergency rate cuts by its global counterparts to combat coronavirus pandemic that has jolted financial markets and the world economy, it falls short of street expectations.
In a survey conducted by Topline Research before the spread of the coronavirus, 80 percent of the fund managers were expecting 50-100bps cut in Policy Rate. That said, a similar poll conducted yesterday revealed that 80 percent of the fund managers have revised their expectations to a 100-200bps cut in Policy Rate.
While acknowledging that medium term inflation target of 5-7 percent is likely to be achieved earlier-than-expected due to steep fall in international oil prices and deceleration in domestic food prices, the SBP opted to conservatively cut the Policy Rate by just 0.75 percent – even though the Pak economy is also likely to face significant impact of coronavirus outbreak.
The analysts estimated that an average 0.5 percent MoM rise in CPI over the next five months would result in CPI inflation clocking in at 8.9 percent YoY in Jul-2020 (sensitivity on next slide), which will translate in a Real Interest Rate of 3.6 percent.
Analysts at Arif Habib Limited said that in response to the rapid contagion of the novel coronavirus world over, with confirmed cases exceeding 183,000 as off latest tally, majority of the effected countries have ordered closure of schools, prohibited large gatherings with a few cities under quarantine and pressed citizens to avoid unnecessary travelling. In addition to this, the Pakistani government advised the public against hoarding of essential food items.
Whereas the prime minister has directed senior government officials to not only carry all preventative measures to mitigate the outbreak of the virus, but also remain in close contact with various international agencies so as to secure monetary assistance to combat the emergency.
With major decline in food inflation previously emanating from temporary supply side shocks, and an abrupt crash in International oil prices amid disintegration of the OPEC-Plus alliance (Arab Light down by 37 percent since Russia’s resistance to deepen cuts and an ensuing price war led by Saudi Arabia), a cut in the benchmark policy rate remained imminent.
Moreover, given the announcement of monetary and fiscal relief by major global economies to contain the potential economic fallout post spread of corona, Pakistan’s case for a rate cut appeared stronger than before given rising interest rate differential. More so since the incumbent government had limited fiscal space.
Accordingly, the State Bank of Pakistan has decided to cut the key policy rate by 75bps in its latest Monetary Policy Statement (MPS).
Analysts at Taurus Research said that outlook for inflation has improved in the light of declining food prices, the significant decrease in international oil prices and slowdown in aggregate demand owing to the coronavirus pandemic.
SBP projects real GDP growth for Pakistan to be around 3 percent for FY20. FY20 inflation target of 11 percent-12 percent.
The MPC noted that under an adverse scenario of economic slowdown, declining exports, lower remittances and dampened sentiment among consumers and businesses, there could be a material negative impact on growth.
Further, the increase in net reserve buffers of the SBP of around USD 10.7Bn (on account of build-up in SBPs reserves and reduction in forward liabilities), was flagged as sufficient to cope with outflows of any foreign portfolio investments.
The MPC also noted that with the reduced policy rate, real interest rates are appropriate to achieve the medium-term inflation target of 5 percent-7 percent.
With the reduction, the analysts anticipate the banking sector spread to peak during 2QCY20, on account of immediate re-pricing of deposits.
KARACHI: The Pak Rupee fell by two paisas against dollar on Tuesday amid demand from importers and corporate buyers.
The rupee ended Rs158.43 to the dollar from previous day’s closing of Rs158.41 in interbank foreign exchange market.
Currency experts said that the rupee had fallen significantly earlier in the day owing to demand from importers and corporate buyers. However, the sharp decline in international oil prices improved the sentiments.
The experts said that falling international oil prices would help the country to reduce its import bill.
The foreign currency market was initiated in the range between Rs158.65 and Rs159.25. The market recorded day high of Rs159.05 and low of Rs158.40 and closed at Rs154.43.
The exchange rate in open market witnessed decline in rupee value. The buying and selling of dollar was recorded at Rs157.50/Rs158.50 from previous day’s closing of Rs157.00/Rs158.00.
KARACHI: The Pak Rupee gained 57 paisas against dollar on Monday owing to falling oil prices in international markets.
The rupee closed at Rs158.41 to the dollar from last Friday’s closing of Rs158.98 in interbank foreign exchange market.
Currency dealers said that the international oil prices were falling constantly due to ease in demand on coronavirus threat and price war between Saudi Arabia and Russia.
The foreign currency market was initiated in the range of Rs157.75 and Rs158.00. The market recorded day high of Rs158.75 and low of Rs157.75 and closed at Rs158.41.
The exchange rate witnessed stable rupee value. The buying and selling of dollar was recorded at Rs157.00/Rs158.00, the same last Friday’s closing level, in cash ready market.
In Karachi, the Pakistani Rupee showcased resilience on Friday, gaining 16 paisas against the US Dollar and breaking a four-day losing streak in the interbank foreign exchange market.
(more…)KARACHI: The Pak Rupee declined by another 71 paisas against dollar on Thursday amid global financial crisis have been deepened after World Health Organization (WHO) declared coronavirus as global epidemic.
The rupee ended Rs159.14 to the dollar from previous day’s closing of Rs158.43 in interbank foreign exchange market.
The local currency fell by Rs4.89 or 3.16 percent against dollar during past four days trading.
Currency experts said the outflow of investment from local debt securities was the primary reason for the rupee devaluation.
The foreign currency market was initiated in the range of Rs158.95 and Rs159.10. The market recorded day high of Rs159.25 and low of Rs158.85 and close at Rs159.14.
The exchange rate in open market also witnessed devaluation in rupee value. The buying and selling of dollar was recorded at Rs157.50/Rs158.50 from previous day’s closing of Rs158.00/Rs158.50 in cash ready market.