Rupee firms against US dollar

[S.Bukhari]

 

[AZADPAKISTAN2009]

Not sure why Dollar is 100 rupee worth , we make every thing to Eat in Pakistan , our currency value should be higher

 

[Riz]

Nothing but bullshit , these takla brotheran are just trolling with us, all of these stories are shosha , dollar price is dependent on countries export not on customers selling or buying, its just a show off for temporary bases . if its down so much in reality why not the price of petrol decreased yet ? When dollar was rising we saw petrol prices increased on daily basis

 

[ziaulislam]

Rupee wrests back some greenback gains
By Kazim Alam
Published: March 12, 2014



KARACHI:

The rupee made a resounding comeback on Tuesday as the value of the US dollar fell below Rs100 in both interbank and open markets.

Marking the strongest appreciation of the last 30 years, the rupee gained as much as 7.7% against the dollar since November 28 when the rupee-dollar parity in the interbank market stood at Rs107.80.

Last time the rupee underwent such a drastic appreciation was following the 9/11 attacks when it gained 6.2% against the dollar in Sept-Dec 2001.

Earlier in December, Finance Minister Ishaq Dar had vowed to depreciate the greenback to below Rs100. He also urged investors to encash their dollars in order to avoid losses.

Commenting on the ongoing trend, Elixir Securities Head of Research Azfar Naseem said he foresees the exchange rate to stabilise at Rs102-Rs103 by the end of the current fiscal year provided the country receives the expected inflows in time.

“Markets tend to overreact to good news sometimes. The equilibrium (exchange) rate, to be established in three to four months, will largely depend on the realisation of inflows that Pakistan expects to receive by June,” Naseem said. The proceeds from the spectrum auction will play a key role in determining the rupee’s value against the dollar, he added.

Pakistan is expected to receive approximately $1.1 billion as a result of the auctions for 3G and 4G telecom licences this year. Similarly, the country expects to receive loans of about $1 billion and $500 million from the World Bank and the Asian Development Bank, respectively, before the end of the fiscal year.

Another $550 million from the International Monetary Fund (IMF) along with $500 million raised through the issuance of Eurobonds is going to pump Pakistan’s foreign currency reserves. In case the country receives full payment against the spectrum auctions along with other expected inflows before June, Naseem says, the rupee-dollar parity may settle at Rs97.

Rajesh Kumar Maheshwari, research analyst at Standard Capital Securities, is more optimistic than Naseem when it comes to the long-term stability of the rupee. “I think the current level will sustain until June with the rupee-dollar parity hovering around Rs100,” he said.

Emphasising that the country’s capital market is remarkably cheap with a price-to-earnings multiple of less than eight, Maheshwari said it is likely to keep attracting foreign investment in coming months.

According to latest data released by the State Bank of Pakistan (SBP), foreign portfolio investment (FPI) in January amounted to $31.5 million, which is 27% of the total FPI that Pakistan has received in the first seven months of the current fiscal year.

Foreign direct investment (FDI) in July-January totaled $523 million with inflows of $106.9 million in January alone.

The rupee’s sudden gains in recent weeks have forced all leading brokerage houses of the country to revise their end-of-year estimates of the rupee-dollar parity.

Bad for exports

While the rupee’s strength will help contain inflation and bode well for the country’s foreign debt profile, it will adversely affect the country’s export competitiveness. According to Shajar Capital, the recent improvement in the rupee-dollar parity is going to result in revenue attrition in oil and gas, power and textile sectors – segments of the economy that are either export-oriented or charge dollar-denominated prices.

Banks’ bottom lines may also be affected by the appreciation in the rupee’s value because of reduced non-funded income from foreign currency transactions.

Sentiment-driven rally?

Apparently, the foreign exchange market is flushed with dollars. One reason for ample supply of dollars, according to Standard Chartered Bank Senior Economist Sayem Ali, is the changed mechanism of oil import payments.

Accounting for roughly 40% of total imports, oil import payments have now been moved out of the interbank and are instead being paid from FE25 loans, Ali said, while referring to the trade loan facility for exporters and importers, which is essentially a deferred payment.

Moreover, Pakistan has recently received about $750 million from ‘friendly countries’ in the newly-established Pakistan Development Fund (PDF) — an account opened to channel money from abroad.

 

[S.Bukhari]

Nothing but bullshit , these takla brotheran are just trolling with us, all of these stories are shosha , dollar price is dependent on countries export not on customers selling or buying, its just a show off for temporary bases . if its down so much in reality why not the price of petrol decreased yet ? When dollar was rising we saw petrol prices increased on daily basis

What a candid analysis sir , either you are an economist or you must be an authority on currency valuation . First thing is first sheikh Sahab challenged mr Dar and he has lost it which he must admit gracefully as he is an honourable politician . On the other hand let me correct you regarding currency devaluation that the balance of payments is just one of the factors which determine currency value .
We already discussed this in detail if you don't mind please read some previous comments .

 

[Panther 57]

what happened dollar went up again to 101

 

[VCheng]

what happened dollar went up again to 101

What happened? One word:

inevitable

adjective

certain to happen; unavoidable.
e.g. "war was inevitable"
synonyms: unavoidable, inescapable, inexorable, ineluctable

 

[Panther 57]

What happened? One word:
inevitable

adjective

certain to happen; unavoidable.
e.g. "war was inevitable"
synonyms: unavoidable, inescapable, inexorable, ineluctable

You get 100% in your final exam. thumbs up. I guess journey restarting. Exporters are not happy with this jugglery by Munshi Ishaq Dar and MNS. With more loans coming from IMF will further deteriorate the situation.

 

[Contrarian]

We have had decades to complete any of these projects. What makes you think we will get going all of a sudden now? Not likely.

It does seem that the current Pakistani dispensation is inclined towards infra projects and some right ones at that.

The track seems to be right, its just that it will take 5 years for the results to appear. Nawaz is making the right moves as far as the economy is concerned.

 

[VCheng]

It does seem that the current Pakistani dispensation is inclined towards infra projects and some right ones at that.

The track seems to be right, its just that it will take 5 years for the results to appear. Nawaz is making the right moves as far as the economy is concerned.

Right ones? Hardly. These are all projects to enrich a few cronies, nothing else. The real important ones are related to governance, which remain nowhere.

 

[Contrarian]

Right ones? Hardly. These are all projects to enrich a few cronies, nothing else. The real important ones are related to governance, which remain nowhere.

Disagree.
Actively seeking and getting investment is an achievement in itself.

Nawaz has obtained funding for conversion of a couple of gas plants to coal based ones.
Small scale hydro projects have started.
Ordering coaches and has started improving railways.
Obtained funding for Lahore Metro
Economic corridor with China
Investments in motorway.

While you may point at these projects as barely started or just mentioned. The fact itself that he has spoken of these is a huge change from the last regime of Zardari in which absolutely nothing happened.

So the path is correct, all that remains to be seen is how fast he is able to implement it. In the last 5 years, there was no path, Pakistan was simply drifting.

 

[VCheng]

Disagree.
Actively seeking and getting investment is an achievement in itself.

Nawaz has obtained funding for conversion of a couple of gas plants to coal based ones.
Small scale hydro projects have started.
Ordering coaches and has started improving railways.
Obtained funding for Lahore Metro
Economic corridor with China
Investments in motorway.

While you may point at these projects as barely started or just mentioned. The fact itself that he has spoken of these is a huge change from the last regime of Zardari in which absolutely nothing happened.

So the path is correct, all that remains to be seen is how fast he is able to implement it. In the last 5 years, there was no path, Pakistan was simply drifting.

All the claimed power projects are pointless as long as the circular debt keeps on piling up unchanged. The small scale hydro projects have been planned and constructed for many decades now and are meant for creating small capacity storage of water primarily. Railways continue to be a disaster, some small improvements notwithstanding. Lipstick on a proverbial animal comes to mind. Pakistan Steel remains a disaster. PIA remains a sink. The famed economic corridor with China is nothing bu t a few miles of new motorway and few more interchanges.

Yes, Pakistan continues to be adrift.

 

[Contrarian]

All the claimed power projects are pointless as long as the circular debt keeps on piling up unchanged. The small scale hydro projects have been planned and constructed for many decades now and are meant for creating small capacity storage of water primarily. Railways continue to be a disaster, some small improvements notwithstanding. Lipstick on a proverbial animal comes to mind. Pakistan Steel remains a disaster. PIA remains a sink. The famed economic corridor with China is nothing bu t a few miles of new motorway and few more interchanges.

Yes, Pakistan continues to be adrift.

This is where I disagree with you.
I see a radical change from the previous Zardari Govt.
Nawaz is far more focused.

Now whether that translates into physical infrastructure or not is a question that only time can answer. Such sort of projects take a minimum of 5 years to come to fruition. But intent is the first step to recovery.

I am surprised you dont see the difference - if not by actions, then atleast of words between Nawaz and Zardari.

 

[VCheng]

This is where I disagree with you.
I see a radical change from the previous Zardari Govt.
Nawaz is far more focused.

Now whether that translates into physical infrastructure or not is a question that only time can answer. Such sort of projects take a minimum of 5 years to come to fruition. But intent is the first step to recovery.

I am surprised you dont see the difference - if not by actions, then atleast of words between Nawaz and Zardari.

Words do not mean much. Results count.

 

[Contrarian]

Words do not mean much. Results count.

Then you are jumping the gun here friend.
Words are a precursor to action.
Action may or may not follow those words of Nawaz.

But they would definitely not follow the silence of Zardari.

This is the difference I am trying to point out. In any case, the projects Pakistan is undertaking now will take a few years before they are completed. I think it harsh to judge before that.