Worth of rupee slip against dollar

Pakistan is a country where the burden of payments and debts are the factors that determines the market-driven exchange rates. The pattern of foreign trade growth also plays a vital role in this regard. A country which does not have sufficient foreign exchange holdings, the above mentioned two factors can be threatening for such an economy. We have seen a sudden change in Pakistan’s market economy when import payment’s scale is increasing upward since March following a passive growth in the last eight months.

Since four months, after the announcement of fiscal year budget in June 2013. The average imports monthly are $4.135 billion. On the other hand, export earning average $1,976 billion monthly. So the graph of external payments is still higher. So this factor determines the currency exchange rates. “So, the timing is important,” said the chief forex dealer at a foreign bank. “We had such a large trade deficit on the one hand and on the other the country also made about $1.5 billion external debt payments (mostly to the IMF) during this period.” A senior expert says that this has been a major factor that determines currency exchange rates. This is how rupee is slipping against the dollar. “If you’ve got to do big external debt servicing, often several times in a month, and with not much in forex reserves, exchange rates will remain under pressure.

Things become even more difficult when imports rise suddenly,” said a central banker. The situation is quite threatening, when market come under the attack of speculation. The interbank rates and open markets have difference in determining the value of rupee. When news of unrest spread into the market, the exchange rates show the ups and down conditions, thus jolted. So there left no purchasing power equivalence between rupee and dollar. Open market currency rate in Pakistan is calculated by banks and cited to the importers and exporters as a pre-indication of the future move of the exchange rate. For instance on June 28, the average rate of one-month dollar and rupee exchange was 100. It denotes that rupee has fallen to 99.66 per dollar at the end of the month of june to 100 by the end of July.

But rupee has lost its value very earlier. Thus identifying the uncertain market condition that could change the external account situation is quite challenging. But interbank se4rvices are doing their utmost effort in this regard. By comparing the past working day, thus incur the forward rate that is helpful for importers and exporters. “This mechanism of forward rate quotations has enabled the inter-bank market on the whole to make more realistic projections of exchange rates,” said the treasurer of a large local bank.

Little Chit Chat about Biz n Pak

Pakistan, well, nothing is going in its favor. For the last decade or so, evil has terribly seized our 2 E’s – Energy and Economy, not to mention extremism. Obviously nobody in his safe mind prefers investing here. Or Do they? OECD placed Pakistan in line with Bangladesh, Myanmar and Niger as ‘Fragile States’. FATF declared Pakistan as ‘High Risk’ and Non Cooperative jurisdiction’. Very meanwhile, our Finance Minister, yesterday at Pakistan Business Seminar in Dubai, broke, ‘We are back in business and are on quick track to recover from economic hit down’. 

While addressing with businessmen, investors and expatriates, he insisted them to invest in Pakistan as there are huge huge huge attractions and opportunities arising ahead.Perhaps, we should not worry over OECD or even FATF. Who buys their shit, all they care is IMF. If so, IMF had put a bit good words on to our condition. IMF said, Pakistan has met all of her quantitative performance markets, showing its economic recovery which remains broadly on track. Thus, we can see business news. Among all bombs, deaths, riots and break ins, live currency rates keep showing that Pakistani Rupee stood stable against dollar and euro in the. Pakistan currency is quite a funny thing, honestly speaking. Like a tall grown bamboo tree, it’s continuously getting hollow, shallow and sleepy. Anyways, still it’s ours.

King Abdullah Instructions Punishing Saudis Involved in Militancy Abroad

RIYADH:On Monday, Saudi Arabia’s King Abdullah issued a royal decree that punishes citizens who fight in conflicts outside the kingdom, with prison sentences ranging from three to 20 years in jail.

The spoke person said that the Saudi Royal Court also says that any Saudi citizen who joins extremist terrorist groups or supports them materially or through incitement would face an even harsher punishment ranging from five to 30 years in jail. The decree appeared aimed at stemming the flow of Saudi fighters going to Syria. The region’s civil war is believed to have drawn hundreds of young Saudis, worrying some in the kingdom that fighters could return radicalized and turn their weapons on the monarchy. Many young Saudi men appear to have been encouraged to join the fight in Syria by influential Saudi clerics who follow the kingdom’s ultraconservative religious Wahhabi doctrine and view the war as a struggle between Syria’s Sunni majority and President Bashar Assad’s Alawite, Shiite-backed minority. The uprising against Assad has transformed into a regional proxy war between Iran and Saudi Arabia, which support opposing sides. Foreign fighters and extremists have infiltrated the opposition; triggering infighting that has undermined the rebellion. The decree comes after a sweeping new counterterrorism law came into effect in the kingdom Sunday that activists say targets virtually any criticism of the government. “This disturbing new law confirms our worst fears – that the Saudi Arabian authorities are seeking legal cover to entrench their ability to crack down on peaceful dissent and silence human rights defenders,” said Said Boumedouha, Middle East Deputy Director at Amnesty International.

For more info see here : International News , Business News , Forex Rate

Obama says the U.S. must Remain Vigilant against al-Qaida

WASHINGTON: President Barack Obama says the U.S. must remain vigilant against al-Qaida as the terror network takes root across the Mideast and North Africa.

The president said during his State of the Union speech Tuesday that America can no longer expect to be safe by pursuing overseas terror networks through war — or even through widespread airstrikes that have been a hallmark of the U.S. fight against extremists. He said extremism in places like Yemen, Somalia, Iraq and Mali will best be defeated with help from foreign allies and through targeted operations and limited use of unmanned drones. Obama also called on Congress to lift restrictions on transferring al-Qaida and Taliban detainees held at the U.S. military base at Guantanamo Bay, Cuba, and finally close the prison.

Business Update: Business News

Today Nawaz leaving for Three-day Turkey visit

ISLAMABAD: On Monday, September 16, 2013, Prime Minister Nawaz Sharif’s maiden visit to one of the closest and brotherly country Turkey is beginning. It would open new vistas and horizons of ties of the two historically close countries since it will mark the start of an unprecedented era of cooperation in numerous fields.

The prime minister is scheduled to stay in Turkey for three days and will engage in back-to-back interactions and result-oriented meetings with the top leadership of the host country. During his stay in Turkey, the prime minister will also meet President Abdullah Gul and co-chair the third session of the High Level Cooperation Council (HLCC).

Related Post: Link(http://www.marketwatch.pk/news/pakistan-business-news/today-nawaz-leaving-for-three_day-turkey-visit)

No devaluation, no compromise over the value of Rupee:

 

Finance minister has showed great deal of anguish over the issue of depreciation of rupee, as predicted by the eminent economic expert of the country. Considering the seriousness of the issue Dar has decided to comment on the issue public ally, this shows his great concern about the value of rupee. The recent deal with IMF is under great discussion by the economist and the recent shift about the deprecation in rupee they considered is the aftereffects of that deal. Ishaq Dar comments over the issue that “I am disappointed to come across comments and analysis by certain eminent economic experts that the rupee is bound to depreciate to 114 (to a dollar) as a result of some implicit understanding between the government of Pakistan and IMF.”

He totally reject the idea that Government and IMF has entered into an agreement to depreciate the value of rupee by 14%. He just throws out this notion and rejects this perception that the value of rupee will fall 14%within a year against dollar. If it is then it will have great impact on foreign exchange rates. He further embarks over the issue and tries to pacify the jolting markets and gave a very strong verdict and called the critics “Pseudo Intellectuals” He further said that there is no adjustment over the depreciation of rupee against dollar with IMF. “Let me assure you that there is neither any explicit nor implicit understanding with the IMF on the devaluation of rupee.”

His recent comments are the aftereffects of IMF report that is based on real effective exchange rate that is showing that rupee will be devalued by 7.7% during 2013-14. On the other hand, economist did great criticism over the IMF assessment; they claimed that the country economy will be cleaned out. If we see the interbank market situation the rupee was traded at the value of 105 against per dollar. But after report its value is more declined in the open market currency rates.The finance minister blamed the speculators who spread such news and thus causing to devaluing the rupee. He said “I am allergic to the words dictated devaluation.” To some extent he is right but IMF report should not be taken non-seriously, it is very serious issue. So is the responsibility to the economic analysts they need to work in a positive way, ishaq was much disappointed when he pointed economists. “I expect all professionals to be more responsible,” he further said that “pessimistic pseudo intellectuals will keep predicting that Pakistan will be a one-tranche country that will miss its key targets again.”

Finance minister was greatly agitated it seems, he said all economists should play a positive role and should work for the nation and on one policy not for their vested interest. He only means not to spread negativism among the people because it will be disastrous for the economy. He said that negotiation with IMF has been done without any compromise over the national interest. The IMF program has been settled on the standards of home-grown reform agenda. Dar is hopeful and optimistic about foreign exchange reserves of the country. He is expecting foreign exchange reserves will be improved up to $20 billion and public debt will be reduce to 57.5% of GDP that is currently 63.5%.

Short-term suspension: PIA stops flights to India, Germany, Netherlands

KARACHI: Faced with shortage of aircraft, the Pakistan International Airlines (PIA) rolled back flights to Germany, Netherlands and India.

A spokesman for the national flag carrier said the decision was taken in the wake of a review of flight operations to find the best way to utilize existing fleet of aircraft, some of which are already busy with the massive Hajj operation. He added, “Flights to Frankfurt, Amsterdam, Delhi and Mumbai were also running below capacity,” The spoke person said, this decision is, however, temporary and the flights to European destination will resume after the end of the “lean season in November.” The decision to discontinue flights has been severely criticized by the airline’s employees who blame the management for doing irreparable damage to the state airliner. It will become difficult for the PIA to attract passengers once they start travelling with other carriers, foresees one of the airline’s unions. PIA was operating six weekly flights to India and one each to Frankfurt and Amsterdam. The airline had to deploy two of its Boeing 777s and as many B-747s for the Hajj flights, which will run till November 18.Joint Action Committee of PIA’s Employees, which represents the pilots, says seat booking volume rose in the last six months and revenue was more than 50 percent on the route of Islamabad to Frankfurt.

Related Post: 

Link(http://www.marketwatch.pk/news/pakistan-business-news )