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: The Pak Rupee deteriorated by another Rs1.04 in early trade on Tuesday ahead of monetary policy announcement and pressure of import and corporate payments.
(more…)KARACHI: The Pak Rupee weakened by Rs1.07 against dollar on Monday owing to demand for imports and corporate payments.
The rupee ended Rs159.87 to the dollar as compared with last Friday’s closing of Rs158.80 in interbank foreign exchange market.
The foreign currency market was initiated in the range of Rs159.00 and Rs159.40 to the dollar. The market recorded day high of Rs159.95 and low of Rs159.40 and closed at Rs159.87.
Currency analysts said that the payment pressure had further weakened the rupee value.
The exchange rate in open market also witnessed deterioration in rupee value. The buying and selling of dollar was recorded at Rs159.50/Rs160.50 as compared with previous closing of Rs158.70/Rs159.30 in cash ready market.
KARACHI: The State Bank of Pakistan (SBP) is scheduled to announce its monetary policy on July 16, 2019 (Tuesday) and analysts forecast central bank may increase key policy rate by another 100 basis points.
Analysts at Arif Habib Limited said that the central bank to increase its policy rate by 100bps to 13.25 percent.
“Primary reason for this increase in policy rate, in our view, is to keep Real Interest Rates positive in light of rising inflation during 1QFY20 on the back of increase in the prices of administered utilities (electricity and gas).”
Average inflation for 1QFY20 is expected to settle at 12.11 percent, while a policy rate of 12.25 percent would imply a real interest rate of just 14bps.
The data for the past 48 months exhibits that average real interest rates have remained approx. 2.3 percent, while under the last IMF program (September 2013 to September 2016) real interest rates hovered at an average of 3.1 percent.
Therefore, it seems unlikely that the central bank would let the real interest rates go negative or below one percent. The staff report document also states that real interest rates would be kept positive to counter inflation.
On the external front, persistent Current Account Deficit continues to weigh in on the economy despite a substantial decline in imports.
For May 2019, CAD has declined by 47 percent YoY to USD1.1 billion. However, in terms of GDP it is still high at 5 percent.
Therefore, in order to reduce this deficit to a sustainable level, the SBP is expected to increase its policy rate to compress demand further.
In addition, with the advent of market determined exchange rate, a persistent Current Account Deficit might result in further weakness in exchange rate which might induce further inflation.
KARACHI: The Pak Rupee continued losing streak on Friday amid higher demand for import and corporate payments.
The rupee ends 31 paisas to close at Rs158.80 to the dollar from previous day’s closing of Rs158.49 in interbank foreign exchange market.
The foreign exchange market was initiated in the range of Rs158.40 and Rs158.70. The market witnessed day high of Rs158.90 and low of Rs158.50 and ended at 158.80.
Currency experts said that the rupee fell during the entire week despite inflows of $994 million from IMF two days ago.
The exchange rate also witnessed depreciation of the rupee in the open market. The buying and selling of dollar was recorded at Rs158.70/Rs159.30 from previous day’s close of Rs158.50/Rs159.50 in cash ready market.
KARACHI: State Bank of Pakistan (SBP) will announce key policy rate for next two months of July 16, 2019, a statement said on Friday.
The SBP said that the Monetary Policy Committee of the central bank would meet on Tuesday, July 16, 2019 at SBP Head Office Karachi to decide the policy rate.
In the previous monetary policy announced on May 20, 2019, the committee decided to increase the policy rate by 150 basis points to 12.25 percent effective from May 21,2019.
The decision was taken into account the considerations and the evolving macroeconomic situation, the committee noted that further policy measures are required to address underlying inflationary pressures from (i) higher recent month-on-month headline and core inflation outturns; (ii) recent exchange rate depreciation; (iii) an elevated fiscal deficit and its increased monetization, and (iv) potential adjustments in utility tariffs.
Analysts at Arif Habib Limited said that the SBP would adopt a proactive stance to increase its benchmark policy rate by 100 basis points in July 2019 to address the underlying pressure on the economy.
In its report issued on June 28, the analysts said that in addition, monetary tightening is expected on the back of i) rising inflationary pressure due to increase in prices of petroleum products, essential food items and price revision of utilities, ii) an elevated fiscal deficit and its increased monetization, and iii) recent exchange rate depreciation.
KARACHI: The State Bank of Pakistan (SBP) on Thursday announced the official procedure for obtaining a loan under the Prime Minister’s Kamyab Jawan SME Lending Program, a flagship initiative aimed at empowering youth and small enterprises across the country.
(more…)KARACHI: The Pak Rupee ended down by 61 paisas on Thursday owing to demand for import and corporate payments.
The rupee closed at Rs158.49 to the dollar as compared with previous day’s closing of Rs157.88 in interbank foreign exchange market.
The foreign currency market was initiated at Rs158.40 and Rs158.70 in interbank foreign exchange market.
The market recorded day high of Rs158.60 and low of Rs158.20 and closed at Rs158.47.
The exchange rate in open market also witnessed depreciation in rupee value. The buying and selling of dollar was recorded at Rs158.50/Rs159.50 from previous day’s closing of Rs157.50/Rs158.50 in cash ready market.
KARACHI: The Pak Rupee ended down by 50 paisas against dollar on Wednesday despite a tranche of $991.4 million received under IMF loan program.
The rupee closed at Rs157.88 to the dollar from previous day’s closing of Rs157.38 in interbank foreign exchange market.
The foreign currency market was initiated in the range of Rs157.45 and Rs157.65. The market recorded day high of Rs157.95 and low of Rs157.65 and closed at Rs157.88.
The exchange rate in open market also witnessed depreciation in local unit.
The buying and selling of the dollar was recorded at Rs157.50/Rs158.50 from previous day’s closing of Rs156.70/Rs157.70 in cash ready market.
KARACHI: The government likely to borrow an amount of Rs6,300 billion from commercial banks through auction of market treasury bills (MTBs) during first quarter (July – September) of current fiscal year.
According to auction target for MTBs issued by State Bank of Pakistan (SBP), the amount would be raised through seven auctions during the period.
The government borrows from commercial banks through sale of commercial papers for budget financing.
The details of auctions showed the government would borrow primarily to repay the matured amount. The details further showed that out of Rs6,300 billion, an amount of Rs5,065 billion would be spent on repayment against matured amount.
The remaining amount of Rs1,234.55 billion would be utilized for budget financing.
Banking analysts said that the government had decided to change the borrowing pattern. During the past fiscal year most of the borrowings were made through central bank. However, the government under IMF loan program agreed not to borrow from the SBP.
The auction target showed that an amount of Rs300 billion would be raised through sale of Pakistan Investment Bonds (PIBs) of fixed rates.
While, an amount of Rs400 billion would be raised through sale of PIB (floating rates).
Analysts said that the banks were taking more interest in government maturities due to frequent increase in policy rate by the SBP. The banking sector is anticipating more hike in interest rate by the SBP during remaining months of current year.
KARACHI: The Pak Rupee ended down by six paisas against dollar on Tuesday due to higher demand for import and corporate payments.
The rupee ended Rs157.38 to the dollar from previous day’s closing of Rs157.32 in interbank foreign exchange market.
The foreign currency market was initiated in the range of Rs157.50 and Rs157.75 against the dollar. The market recorded day high of Rs157.70 and low of Rs157.35 in interbank foreign exchange market.
The exchange rate in open market also witnessed depreciation in rupee value by 20 paisas.
The buying and selling of dollar was recorded at Rs156.70/Rs157.70 from previous day’s closing of Rs156.50/Rs157.50 in cash ready market.