ISLAMABAD: Pakistan is bracing for the impact of the sharp decline of its currency against the dollar – sparking fears of punishing inflation.
The weakening rupee, which now trades at about 110 against the greenback, will increase prices in Pakistan as the cost of imports rises.
“Firstly, the devaluation can increase the debt burden of foreign loans and make the servicing more difficult. Secondly, the rise in cost of imports can increase the inflation rate in the economy,” researcher Hafiz Abdul Qadoos of the Institute of Public Policy, told Arab News.
Last week, the International Monetary Fund (IMF) mission to Pakistan appreciated the State Bank’s (SBP) adjustment to the currency exchange but advised that the Rupee must remain flexible moving forward.
The IMF rejected suggestions that it played a role in SBP’s decision in devaluating the currency.
IMF Mission Chief to Pakistan Harald Finger, said: “The government’s biggest challenge is political uncertainty. The second biggest challenge for Pakistan has been maintaining foreign exchange reserves. To contain the fiscal deficit has been the third biggest challenge for Pakistan.”
He said that under current reserve positions, Pakistan does not require borrowing from IMF.
However, some experts believe that Pakistan might go back to the IMF by August or September 2018 – despite floating Eurobonds and Sukuk (Islamic bonds) worth $2.5 billion recently and increasing the regulatory duty on imports.
Former Finance Minister and ex-Vice President of World Bank, Shahid Javed Burki explained that
the currency had been under pressure for several years
“The rupee was under pressure as the country was losing its export markets to other low-income exporters, most notably Bangladesh and Vietnam.”
He added that the rate of inflation in Pakistan was much higher than that in its main export markets such as the US.
Pakistan currency plunge stokes inflation fears
Pakistan currency plunge stokes inflation fears
Closing Bell: Saudi main index closes in green at 11,382
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Tuesday, gaining 111.21 points, or 0.99 percent, to close at 11,381.83.
The total trading turnover of the benchmark index was SR6.37 billion ($1.70 billion), as 204 of the listed stocks advanced, while 56 retreated.
The MSCI Tadawul Index also rose, adding 13.85 points, or 0.91 percent, to close at 1,533.33.
The Kingdom’s parallel market Nomu gained 8.39 points, or 0.04 percent, to close at 23,749.38. This came as 30 of the listed stocks advanced, while 45 retreated.
The best-performing stock was East Pipes Integrated Co. for Industry, with its share price surging 9.94 percent to SR146.
Other top performers included Tourism Enterprise Co., which saw its share price rise by 9.93 percent to SR14.17, and Thob Al Aseel Co., which saw a 7.84 percent increase to SR3.99.
On the downside, Saudi Arabian Mining Co. was among the weaker performers, with its share price falling 2.64 percent to SR77.40.
Saudi Paper Manufacturing Co. saw its shares fall 2.54 percent to SR57.50, while Yamama Cement Co. declined 2.07 percent to SR27.40.
On the announcements front, Future Vision for Health Training Co. signed a two-year cooperation agreement with King Saud University aimed at strengthening links between academia and professional readiness.
According to a Tadawul statement, the partnership focuses on the joint development and execution of specialized training programs for university students, aiming to enhance their practical skills and employability.
The initiative includes coordinated efforts in training design, academic supervision, and program evaluation, with the goal of better preparing graduates for the labor market.
The agreement, which is renewable by mutual consent, is expected to start generating a positive financial impact in the second half of 2026. The company said no related parties are involved in the deal.
The company’s share price closed at SR7.30 on Nomu, marking a 1.39 percent decrease.
