Weekly review
\n KARACHI
\nThe Pakistani rupee is likely to stay under pressure against the greenback next week due to higher demand for dollars from oil importers and other goods seeking to meet payment obligations, according to traders. As per the traders, a persistent decline in the foreign exchange reserves, dried foreign inflows, and soaring trade deficit are weighing on the sentiment for the local unit. The currency market opened after a week\u2019s long Eidul Fitr holidays on Friday. The rupee lost 94 paisas or 0.50% to close at 186.63 per dollar in the interbank market.
\nThere is demand from importers wishing to make payments post Eid holidays. They are back to the market.
\n The inflows from remittances and export proceeds are not sufficient to meet the market demand,. Some traders said the rupee lost ground despite higher dollar inflows in the form of remittances received from Pakistani citizens employed abroad during the holy month of Ramazan and Eid festival. A sharp depletion in the foreign currency reserves during the last few months and higher import payments put pressure on the domestic currency.
\nThe country\u2019s forex reserves fell 0.7% to $16.5 billion in the week ending April 30 on increased external debt payments. The reserves held by the State Bank of Pakistan declined by $59 million to $10.5 billion. With a surging current account deficit and foreign reserves falling to as low as 10.5 billion (adequate to pay less than two months of imports), the country is in a dire need of external finances. There has not been any development on $2.4 debt roll over from China.
\nThe government has requested Saudi Arabia not to withdraw $3 billion deposits from the State Bank of Pakistan, but to extend maturity on this debt. The International Monetary Fund has agreed to resume a $6 billion loan programme, but the formal approval may take another 4-6 weeks and will pass the crucial new budget period. Agencies
\nData from Pakistan Bureau of Statistics showed that the country\u2019s trade deficit climbed 65% to $39.3 billion in 10 months of this fiscal year fueled by higher imports.
\nIn April, the trade gap rose 24% year-on-year to $3.74 billion. Total imports increased 46.4% to $65.5 billion in July-April FY2022, while exports rose 25.5% to $26.2 billion. Fiscal and current account deficits are at abnormally high levels as is inflation. Globally stock markets are under duress and the Ukraine crisis seems to be deteriorating with increased risks of contagion. The research noted that with these developments in the background, the new government would need to carefully trend the economic landscape.<\/p>\n","protected":false},"excerpt":{"rendered":"
Weekly review KARACHI The Pakistani rupee is likely to stay under pressure against the greenback next week due to higher demand for dollars from oil importers and other goods seeking to meet payment obligations, according to traders. As per the traders, a persistent decline in the foreign exchange reserves, dried foreign inflows, and soaring trade […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-259283","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-top-news"},"yoast_head":"\n