Rupee suffers 4% fall in intra-day movement

[SunilM]

Owing to foreign payment pressure and political uncertainty in Pakistan, and in the world, the rupee weakened 4% on Friday, with the inter-bank rate becoming Rs110 to the US dollar at one point of the currencies’ trade.
The inter-bank opened the day at Rs105.50 and touched Rs110 during the wee hours. It was trading at Rs108.50-Rs109 per US dollar 45-minutes before Friday break at 12.30pm.



“We are observing the situation… and will take action if needed,” spokesperson Abid Qamar of State Bank of Pakistan told to The Express Tribune on the phone.

The market is moving on its own fundamentals, there might be some payment pressure as well. If the situation doesn’t calm down, the central bank will take necessary action by the evening, he added.
The open market strictly followed movement in the inter-bank throughout its first session on Friday; the inter-bank market will resume at approximately 2:30pm.
President Forex Association of Pakistan Malik Bostan said there was no panic in the open market. “People have adopted the wait and see strategy following heavy losses sustained in July in a similar situation,” he said.
“It seems the International Monetary Fund (IMF) has mounted pressure to devalue the rupee,” he said, adding, “if this is the situation the government must take the nation into confidence.”

With the political canvas changing everyday, including Pakistan Peoples Party (PPP) joining hands with the Pakistan Awami Tehreek (PAT) to demand the resignation of Punjab Chief Minister Shehbaz Sharif, or with Jamaat-e-Islami (JI) planning a street protest against US President Donald Trump’s decision to recognise Jerusalem as Israel’s capital — political uncertainty is sure to have its affect on the market.
Earlier in July 2017, the rupee lost 3.19% to Rs108.25 per US dollar for one day only in the inter-bank, but intervention by the then Finance Minister Ishaq Dar helped it recover to Rs105.70 per US dollar the next day.

I had predicted it. The devaluation was coming. I see the PKR at Rs 125-130 by July 2018, after which Pakistan will be eligible to approach the IMF. It is imperative that one coverts their savings to dollars now so that losses can be curtailed and profits can be made 6 month down the line. One must remember the repayment for the IMF loans kicks in from March 2018, where after the devaluation will be even more severe and who knows whether there will be any political stability at that time, especially when the opposition would want to make sure that the Govt falls before the senate elections in March 18.

 

[Bilal9]

Owing to foreign payment pressure and political uncertainty in Pakistan, and in the world, the rupee weakened 4% on Friday, with the inter-bank rate becoming Rs110 to the US dollar at one point of the currencies’ trade.
The inter-bank opened the day at Rs105.50 and touched Rs110 during the wee hours. It was trading at Rs108.50-Rs109 per US dollar 45-minutes before Friday break at 12.30pm.



“We are observing the situation… and will take action if needed,” spokesperson Abid Qamar of State Bank of Pakistan told to The Express Tribune on the phone.

The market is moving on its own fundamentals, there might be some payment pressure as well. If the situation doesn’t calm down, the central bank will take necessary action by the evening, he added.
The open market strictly followed movement in the inter-bank throughout its first session on Friday; the inter-bank market will resume at approximately 2:30pm.
President Forex Association of Pakistan Malik Bostan said there was no panic in the open market. “People have adopted the wait and see strategy following heavy losses sustained in July in a similar situation,” he said.
“It seems the International Monetary Fund (IMF) has mounted pressure to devalue the rupee,” he said, adding, “if this is the situation the government must take the nation into confidence.”

With the political canvas changing everyday, including Pakistan Peoples Party (PPP) joining hands with the Pakistan Awami Tehreek (PAT) to demand the resignation of Punjab Chief Minister Shehbaz Sharif, or with Jamaat-e-Islami (JI) planning a street protest against US President Donald Trump’s decision to recognise Jerusalem as Israel’s capital — political uncertainty is sure to have its affect on the market.
Earlier in July 2017, the rupee lost 3.19% to Rs108.25 per US dollar for one day only in the inter-bank, but intervention by the then Finance Minister Ishaq Dar helped it recover to Rs105.70 per US dollar the next day.

I had predicted it. The devaluation was coming. I see the PKR at Rs 125-130 by July 2018, after which Pakistan will be eligible to approach the IMF. It is imperative that one coverts their savings to dollars now so that losses can be curtailed and profits can be made 6 month down the line. One must remember the repayment for the IMF loans kicks in from March 2018, where after the devaluation will be even more severe and who knows whether there will be any political stability at that time, especially when the opposition would want to make sure that the Govt falls before the senate elections in March 18.

OMG.....

No......

The sky is not falling.....

Vulture wishes don't kill livestock....

 

[Imran Khan]

good for my loans in pakistan

 

[bananarepublic]

Lower value means cheap exports...
Bear in mind that Pakistani rupee has been the only currency in asia which has been strengthening itself.

 

[Affan-khan]

still trading at
inter bank 105.25 - 105.47
open market 107.4

 

[El Sidd]

Baniya itna pareshan hai

 

[MULUBJA]

Baniya itna pareshan hai

Kaun Pareshan hai. Just ek article post kiya hai? Lagta hai aap pareshan hai aur dalna chahte hai dusron pe.

 

[El Sidd]

Kaun Pareshan hai. Just ek article post kiya hai? Lagta hai aap pareshan hai aur dalna chahte hai dusron pe.

ap Bharat me beth kar itna pareshan hai jitna Pakistan me betha Pakistani nahi hai.....

jo hoga dekha jaega. usme itna rona dhona chaati peetna kion lagaya hua hai apne.....

esa kiya masla hogaya hai apko jo apne mulk ko chor kar Pakistan ki fikar khaye ja rahi hai apko.....

 

[SunilM]

Why hide insecurities by making personal attacks. They just become even more obvious. Anyways, SBP intervened and the PKR regained its value for today. But for how long? I mean with each intervention you loose precious forex. Ok lets see.... Pakistan had taken a loan of Rs 3.6 billion in this quarter ( 2.5 billioneuro/sukuk + 1.1 billion shorterm). Your forex held with SBP after adding all up comes to 14.8 billion dollars. This is the same position you were in during Mar-Apr 2017. So its clear there is an out go of a billion dollars per month. You need 14 billion to cover 3 months of Import. So by the end of this month you will be less than 14 billion figure again!

In the mean while Rizvi, Tahir ul kardi,Imran congregate in Isloo/ Lahore to create that perfect storm. I mean there is never a dull moment here, is there? While all this is happening, CAD is out of control and there is more pressure on currency due to the he political crisis.

Hence the currency which is clearly over valued will depreciate. Btw, there is nothing wrong with devaluation and should have been carried out some time ago. Also IMO, its better to do it in installments than in one go. That hurts the general awam.So keeping in mind the aforesaid, what did I advice? Convert the rupee into dollar and earn a handsome profit within an year? And I reiterate that advice.

Also, to those who have a genuine interest in the subject? Do you think SBP should intervene in the market and keep the PKR steady or should it let it depreciate and find its value as per market forces?

 

[Spy Master]

Why hide insecurities by making personal attacks. They just become even more obvious. Anyways, SBP intervened and the PKR regained its value for today. But for how long? I mean with each intervention you loose precious forex. Ok lets see.... Pakistan had taken a loan of Rs 3.6 billion in this quarter ( 2.5 billioneuro/sukuk + 1.1 billion shorterm). Your forex held with SBP after adding all up comes to 14.8 billion dollars. This is the same position you were in during Mar-Apr 2017. So its clear there is an out go of a billion dollars per month. You need 14 billion to cover 3 months of Import. So by the end of this month you will be less than 14 billion figure again!

In the mean while Rizvi, Tahir ul kardi,Imran congregate in Isloo/ Lahore to create that perfect storm. I mean there is never a dull moment here, is there? While all this is happening, CAD is out of control and there is more pressure on currency due to the he political crisis.

Hence the currency which is clearly over valued will depreciate. Btw, there is nothing wrong with devaluation and should have been carried out some time ago. Also IMO, its better to do it in installments than in one go. That hurts the general awam.So keeping in mind the aforesaid, what did I advice? Convert the rupee into dollar and earn a handsome profit within an year? And I reiterate that advice.

Also, to those who have a genuine interest in the subject? Do you think SBP should intervene in the market and keep the PKR steady or should it let it depreciate and find its value as per market forces?

what's your concern kid? Why are you bothering so much? Look at your miserable country and try improving it...Don't bother about us!

 

[VCheng]

@Chak Bamu Here it comes, as we discussed earlier:

https://www.dawn.com/news/1375449/in-talks-with-imf-pakistan-agrees-to-depreciate-rupee

In talks with IMF, Pakistan agrees to depreciate rupee
Khaleeq Kiani Updated December 09, 2017


ISLAMABAD: Amid a policy decision on Friday to allow rupee depreciation, Pakistan and an International Monetary Fund (IMF) delegation concluded the first round of discussions on the country’s economy. Now members of the IMF delegation and Pakistan team are taking a two-day break to prepare for the policy-level wrap-up by Dec 13-14.

A senior official told Dawn that the State Bank of Pakistan (SBP) would now let the currency exchange rate to adjust to market conditions after many months, rather years, of resisting expectations. The timing of the move was planned for Friday to ensure materialisation of $2.5 billion worth of receipts from two international bonds launched last month.

This calculated move allowed the currency rate to touch Rs110 to a dollar on Friday before settling down at around Rs107 and did not go beyond official estimates. The two weekend holidays would give a breathing space instead of over-steaming the exchange rate.

The sources said that the IMF had concerns over the health of Pakistan’s external sector, but the government authorities had different opinions. As the two sides concluded technical talks, the IMF team will prepare a report of its assessment over the weekend and share with Pakistan officials on Monday for the feedback and discussions.

While the government team, led by secretary of finance Shahid Mehmood will review the assessment, the IMF mission to Pakistan, led by Harald Finger, will visit Lahore next week for talks with provincial authorities including Chief Minister Shahbaz Sharif and independent observers and researchers from the business community and representatives of a private-sector university.

The authorities believed the currency adjustment would help shift foreign currency holdings from commercial banks currently standing at a higher level of around $6 billion back to official reserves and help divert remittances to official channels with declining gap among the official, banking and open market rates.

For the first time after many months, the central bank is reported to have noticed exporters to offload their positions. In the long run, the recent imposition or increase in the import duties and regulatory duties would make unnecessary imports expensive.

An official said that projections for CPEC-related repayments were within the range already discussed by the two sides in connection with debt sustainability analysis as $23 billion worth of projects were currently under various stages of implementation, including $17 billion in the energy sector by the private sector. About $6 billion worth of projects are in the road sector.

While a clean certificate of economic health from the IMF is useful for international financial institutions and investment sentiment, the two sides are reported to have noted that recent bond results were very positive for the fact that this was the first fund raising from international capital market without the IMF programme after many years and attracted favourable response and rates despite high twin deficits, showing confidence of international investors and good reflection of fundamentals.

The IMF director of Middle East and Central Asian Department (MCD), Jihad Azour, the former finance minister from Lebanon, will also join the final round of talks next week. While the Pakistani side will continue to be led by Mr Mehmood, a meeting of the IMF mission could also be arranged with Prime Minister Shahid Khaqan Abbasi who holds the portfolio of the finance minister, depending on the gaps in policy positions, a source said.

Pakistan would continue to remain under the IMF’s post-programme monitoring (PPM) until about 2023 for borrowing significantly higher than its quota. The threshold for Pakistan to move out of the PPM is estimated at 1.4 billion special drawing rights (SDRs) of the IMF that now stand around 4.3 SDRs.

Secretary Finance Shahid Mahmood, when contacted, said that the two sides held various rounds of technical discussions over the last week and covered a host of areas including macroeconomic situation, developments in energy, financial, monetary and social sectors. He said that he shared with the IMF delegation an overview of the economy which was on track and key economic indicators were moving in the positive direction. He said that significant growth had been achieved in revenue generation in the current fiscal year.

He said that Pakistan had achieved fiscal consolidation without compromising on expenditures on development and social protection and the government had set its eyes on achieving 6pc GDP growth which was inclusive, pro-poor and sustainable. Mr Mahmood said that the recent successful launch of Sukuk and Euro Bond were also discussed briefly.

Published in Dawn, December 9th, 2017

 

[MULUBJA]

ap Bharat me beth kar itna pareshan hai jitna Pakistan me betha Pakistani nahi hai.....

jo hoga dekha jaega. usme itna rona dhona chaati peetna kion lagaya hua hai apne.....

esa kiya masla hogaya hai apko jo apne mulk ko chor kar Pakistan ki fikar khaye ja rahi hai apko.....

Rota kaun hai. Rote to aap log ho. Ham to kam karne walon main se hai. Huam rone walon mai se nahi.

 

[SunilM]

@Chak Bamu Here it comes, as we discussed earlier:

https://www.dawn.com/news/1375449/in-talks-with-imf-pakistan-agrees-to-depreciate-rupee

In talks with IMF, Pakistan agrees to depreciate rupee
Khaleeq Kiani Updated December 09, 2017


ISLAMABAD: Amid a policy decision on Friday to allow rupee depreciation, Pakistan and an International Monetary Fund (IMF) delegation concluded the first round of discussions on the country’s economy. Now members of the IMF delegation and Pakistan team are taking a two-day break to prepare for the policy-level wrap-up by Dec 13-14.

A senior official told Dawn that the State Bank of Pakistan (SBP) would now let the currency exchange rate to adjust to market conditions after many months, rather years, of resisting expectations. The timing of the move was planned for Friday to ensure materialisation of $2.5 billion worth of receipts from two international bonds launched last month.

This calculated move allowed the currency rate to touch Rs110 to a dollar on Friday before settling down at around Rs107 and did not go beyond official estimates. The two weekend holidays would give a breathing space instead of over-steaming the exchange rate.

The sources said that the IMF had concerns over the health of Pakistan’s external sector, but the government authorities had different opinions. As the two sides concluded technical talks, the IMF team will prepare a report of its assessment over the weekend and share with Pakistan officials on Monday for the feedback and discussions.

While the government team, led by secretary of finance Shahid Mehmood will review the assessment, the IMF mission to Pakistan, led by Harald Finger, will visit Lahore next week for talks with provincial authorities including Chief Minister Shahbaz Sharif and independent observers and researchers from the business community and representatives of a private-sector university.

The authorities believed the currency adjustment would help shift foreign currency holdings from commercial banks currently standing at a higher level of around $6 billion back to official reserves and help divert remittances to official channels with declining gap among the official, banking and open market rates.

For the first time after many months, the central bank is reported to have noticed exporters to offload their positions. In the long run, the recent imposition or increase in the import duties and regulatory duties would make unnecessary imports expensive.

An official said that projections for CPEC-related repayments were within the range already discussed by the two sides in connection with debt sustainability analysis as $23 billion worth of projects were currently under various stages of implementation, including $17 billion in the energy sector by the private sector. About $6 billion worth of projects are in the road sector.

While a clean certificate of economic health from the IMF is useful for international financial institutions and investment sentiment, the two sides are reported to have noted that recent bond results were very positive for the fact that this was the first fund raising from international capital market without the IMF programme after many years and attracted favourable response and rates despite high twin deficits, showing confidence of international investors and good reflection of fundamentals.

The IMF director of Middle East and Central Asian Department (MCD), Jihad Azour, the former finance minister from Lebanon, will also join the final round of talks next week. While the Pakistani side will continue to be led by Mr Mehmood, a meeting of the IMF mission could also be arranged with Prime Minister Shahid Khaqan Abbasi who holds the portfolio of the finance minister, depending on the gaps in policy positions, a source said.

Pakistan would continue to remain under the IMF’s post-programme monitoring (PPM) until about 2023 for borrowing significantly higher than its quota. The threshold for Pakistan to move out of the PPM is estimated at 1.4 billion special drawing rights (SDRs) of the IMF that now stand around 4.3 SDRs.

Secretary Finance Shahid Mahmood, when contacted, said that the two sides held various rounds of technical discussions over the last week and covered a host of areas including macroeconomic situation, developments in energy, financial, monetary and social sectors. He said that he shared with the IMF delegation an overview of the economy which was on track and key economic indicators were moving in the positive direction. He said that significant growth had been achieved in revenue generation in the current fiscal year.

He said that Pakistan had achieved fiscal consolidation without compromising on expenditures on development and social protection and the government had set its eyes on achieving 6pc GDP growth which was inclusive, pro-poor and sustainable. Mr Mahmood said that the recent successful launch of Sukuk and Euro Bond were also discussed briefly.

Published in Dawn, December 9th, 2017

You beat me to it!! I should have posted this article!! Hopefully now we can have a rational debate.

P.s. I again reiterate convert rupee into dollar. You will be getting a return between 20-30 % within a year. This is an opportunity of a lifetime. Avail it.

 

[SunilM]

Straight from the horses mouth.......

Interbank exchange rate movement an ‘adjustment’ after increasing exports: SBP


Staff Report

DECEMBER 9, 2017

KARACHI: State Bank of Pakistan has termed movement in the interbank exchange rate an “adjustment” in the backdrop of increasing exports, foreign direct investment (FDI) & workers’ remittances and pressure on foreign exchange reserves due to current account deficit and depleting reserves.

On Friday, Pak Rupee depreciated by 2.6 percent against dollar in interbank market, from Rs 105.55 to Rs 109.50 and closed at Rs 107. Almost half way into the current fiscal year, Pakistan’s economy is well positioned to achieve the real GDP growth target of 6 percent in 2017-18. The positive outlook is supported by a broad-based 8.4% growth in large scale manufacturing during the first quarter of the year, and encouraging assessment of major crops, while services are likely to benefit from the positive spillovers of the growing commodity sector, the bank said.

The central bank said that exports recorded a double-digit growth during Jul-Oct FY18; foreign direct investment reached a nine-year high; and workers’ remittances posted a modest growth. However, the continuation of high growth in imports led to a widening of current account deficit, and consequently to depletion in country’s foreign exchange reserves. These pressures have persisted leading to the adjustment in inter-bank exchange rate. This movement in the exchange rate is based on demand and supply of foreign exchange in interbank market.

Strong growth in private sector credit, particularly in fixed investment loans, also reflects the dynamism in the real economic activity. Moreover, inflation continues to remain low and stable, and stood at 3.6 percent during the first five months of the year.

The SBP was of the view that the market-driven adjustment in exchange rate will contain the imbalance in external account and sustain higher growth trajectory. The exchange rate will continue to reflect the demand and supply conditions; and SBP stands ready to intervene, in case speculative and/or momentary pressures emerge, for smooth functioning of the foreign exchange markets, the bank said.

Published in Daily Times, December 9th 2017.

 

[El Sidd]

Rota kaun hai. Rote to aap log ho. Ham to kam karne walon main se hai. Huam rone walon mai se nahi.

Chalo acha kia. Ab aglay mahinay bhi batana.