Rupee shoots to 23-month high
Closes at Rs152.6 against dollar as remittances rise in Ramazan
KARACHI:
Pakistani rupee maintained its uptrend for the seventh successive working day and hit a 23-month high of Rs152.6 against the US dollar in the inter-bank market on Thursday following an increase in supply of foreign currencies compared to demand in the domestic market.
With fresh appreciation of Rs0.44, the rupee has cumulatively gained Rs1.9 (or 1.23%) in the past seven working days and closed at Rs152.6 against the US dollar. Such a closing level was last seen in June 2019, according to the State Bank of Pakistan’s (SBP) data.
Pakistan’s REER index hits equilibrium
Further gain in rupee, inflation may make exports uncompetitive
KARACHI:
Pakistan’s real effective exchange rate (REER) hits equilibrium. However, a further appreciation in rupee against a basket of major trading partners’ currencies and increase in domestic inflation reading would make the country’s exports uncompetitive.
The REER index increased 3.37% to 100.50 in March 2021 compared to 97.22 in February, Pakistan’s central bank reported on Thursday.
REER returned to over 100 reading on the index after over two years. A further increase in the rate would make Pakistan’s exports uncompetitive and would make imports cheaper. REER increased after the rupee-dollar exchange rate hit 22-month high at Rs152.75 to the US dollar on March 31 and inflation surged 9.1% in March.
The LSM sector has grown 7.45% in the first eight-month of current fiscal year amid third wave of Covid, according to the Pakistan Bureau of Statistics.
Rising global oil prices to fuel local troubles
Uptrend may increase inflation, import bill and widen fiscal deficit in economy
Informal talks between ministers are set to take place on Saturday. PHOTO: REUTERS
KARACHI:
The international oil prices are rapidly rising in global markets. The uptrend in the global commodity is likely to give birth to new challenges in the domestic economy including increase in inflation, surge in import bill and widen fiscal deficit.
The international benchmark crude oil Brent increased 28% since December 2020 and hit a one-year high of over $66.5 per barrel on Monday and continued to move around $65-66 per barrel on Tuesday. Majority of the global and local research houses have projected the oil price to maintain its uptrend and hit $70 per barrel ahead of the return of summer season when demand peaks every year.
Pakistan recorded a current account deficit - higher foreign expenditures compared to income - for the second successive month in January at $229 million mainly due to increase in import of food items, industrial raw material and machinery.