KARACHI: Pakistani currency on Tuesday extended declines following the withdrawal of hot money from country’s capital market and global fears triggered by coronavirus pandemic, analysts said.
Pakistani Rupee has lost its value by 1.4 percent since Monday in interbank market to Rs.158.25 against the US dollar by Tuesday afternoon trade as compared to Rs.155.50 of Monday opening. The currency has lost value by more than 2 percent since the March 2, 2020 currency dealers say.
Capital market analysts link the rupee depreciation with volatile global and local equity markets and the withdrawal of hot money from government papers which has registered $182.55 million outflows in first six days of March 2020, according to State Bank of Pakistan.
“The global volatility that has triggered outflows of foreign funds from risky investment avenues to risk free markets like USA and Japan is the possible reason for Pak rupee depreciation,” Samiullah Tariq, Director research at Arif Habib, told Arab News adding that “The funds are moving out from Pakistan, India and other regional markets for save havens.”
The Special Convertible Rupee Accounts (SCRA) maintained by Pakistan’s central bank shows that the south Asian country’s capital market attracted $4.105 billion during July 2019 to March 06, 2020. The majority or 83 percent of the foreign fund inflows were attracted in short-term treasury bills which offer as much as 13.38 percent returns.
Currency dealers say they witnessed panic buying of greenback following Monday’s equity market crash that dropped 2300 points and triggered panic selling.
“The foreign investors sold rupee in the interbank market as they wanted to exchange with dollars. The panic buying and selling upset the exchange rates in the currency market,” Malik Bostan, President, Forex Association of Pakistan, told Arab News.
“After Coronavirus outbreak the investors are offloading their positions from the equity market and they want to convert into dollars that is putting pressure on the Pak rupee,” he added.
However, dealers say the buying activity in the open market is confined to only 2 percent that comes from those traveling abroad while 98 percent exchange goes to banks.
“Our daily buying and selling stands at $100-150 million while we are providing around $300 million to banks,” Bostan noted.
Pakistani Rupee drops against dollar as panic buying goes up
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Pakistani Rupee drops against dollar as panic buying goes up
- Foreign investors have withdrawn $182 million from Pakistan capital market, central bank data shows
- Global volatility has triggered outflows of foreign funds from risky investment avenues to risk free markets
Pakistani, Bangladeshi officials discuss trade, investment and aviation as ties thaw
- Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war
- Ties between Pakistan, Bangladesh have warmed up since last year and both nations have resumed sea trade
ISLAMABAD: Pakistan's High Commissioner to Bangladesh Imran Haider on Sunday met Chief Adviser Muhammad Yunus in Dhaka, the latter's office said on, with the two figures discussing trade, investment and aviation.
Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.
Ties between Pakistan and Bangladesh have warmed up since former prime minister Sheikh Hasina’s ouster as a result of a student-led uprising in August 2024. Relations remain frosty between Dhaka and New Delhi over India’s decision to grant asylum to Hasina.
Pakistan has attempted to forge closer ties with Bangladesh in recent months and both South Asian nations last year began sea trade, followed by efforts to expand government-to-government commerce.
"During the meeting, both sides discussed ways to expand cooperation in trade, investment, and aviation as well as scaling up cultural, educational and medical exchanges to further strengthen bilateral relations between the two South Asian nations," Yunus's office said in a statement on X.
In 2023-24 Pakistan exported goods worth $661 million to Bangladesh, while its imports were only $57 million, according to the Trade Development Authority of Pakistan. In Aug. this year, the Pakistani and Bangladeshi commerce ministries signed a memorandum of understanding to establish a Joint Working Group on Trade, aiming to raise their bilateral trade volume to $1 billion in the financial year that began in July.
The Pakistani high commissioner noted that bilateral trade has recorded a 20 percent growth compared to last year, with business communities from both countries actively exploring new investment opportunities, according to the statement.
He highlighted a significant increase in cultural exchanges, adding that Bangladeshi students have shown strong interest in higher education opportunities in Pakistan, particularly in medical sciences, nanotechnology, and artificial intelligence. Haider also said that Dhaka-Karachi direct flights are expected to start in January.
"Chief Adviser Professor Muhammad Yunus welcomed the growing interactions between the two countries and emphasized the importance of increased visits as well as cultural, educational and people-to-people exchanges among SAARC (South Asian Association for Regional Cooperation) member states," the statement read.
"Professor Yunus also underscored the need to further boost Bangladesh–Pakistan trade and expressed hope that during Mr. Haider’s tenure, both countries would explore new avenues for investment and joint venture businesses."
