“Taking nothing away from a stable currency benefits, they wonder who will talk about the more critical issues of productivity, enabling environment, fiscal space and long-term reforms. Most central banks have been intervening to support their currencies (and in a big way too), what worries economists was the fact that the new finance minister has said that his top priority was to strengthen the rupee to at least 200 per dollar level, it said. So while the rupee can be shepherded to the 200 level, economically, it may not be viable, especially in the backdrop of regional currencies making all-time lows (INR touched 82.30/$, OPEC supported oil prices by cutting back on production and the real effective exchange rate, at 220/$, is around 105),” it added. “In addition, free subsidy to importers (through cheaper dollars) will add to the economic woes. Imports declined 20% year-on-year to $5.27 billion.įor foreign exchange, “we continue to see rupee strengthen to the 210/$ level”, while this momentum could take the dollar lower to 200, “anything below 210 will start hurting exports substantially,” said Tresmark in a note. Exports slightly fell 1% to $2.39 billion in September from $2.41 billion a year earlier. The trade deficit fell 31% year-on-year to $2.88 billion in September, according to data from the Pakistan Bureau of Statistics. The decline in the reserves was due to external debt repayment, which includes interest payments on Eurobonds. The reserves are adequate to cover 1.13 months of imports. “There are sufficient supplies available in the market to match the importer demand.”Īccording to the dealer, speculative activity had declined because the government appears to have controlled speculative trading.įoreign reserves held by the SBP fell by $106 million to $7.9 billion in the week that ended September 30. “The trend for the rupee is to keep going strong,” a forex trader said, adding that the exporters were rushing to sell dollars before the local currency appreciated further. On Friday, the rupee ended at 219.92 per dollar, 0.92% stronger than its previous close of 221.94 in the interbank market. Pakistani rupee outperformed major currencies against the dollar during the outgoing week. However, all eyes will be on the State Bank of Pakistan (SBP) to see whether it will raise the interest rates or keep them at their current levels today (Monday). Traders and analysts believe that the Pakistani rupee is unlikely to fall from its current levels against the US dollar, which has helped it gain almost 4% during the previous week. 'Rupee unlikely to fall from current levels'
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