Pakistani rupee hits all-time low after interest rate cut

In this file photo, a Pakistani man talks on the phone in front of a poster displaying US dollars at the currency exchange place in Lahore on May 16, 2019. (AFP)
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Updated 27 March 2020

Pakistani rupee hits all-time low after interest rate cut

  • Rupee declined by 3 percent to Rs167 against the dollar in the interbank market
  • Foreign investors have withdrawn $1.8 billion from Pakistan’s capital market since July 2019

KARACHI: The Pakistani rupee has dropped to its all-time low against the US dollar in the interbank market on Thursday, after the central bank slashed its key rate by 1.5 percent to shield the economy from the impacts of the coronavirus outbreak.
The rupee declined by 3 percent to Rs167 against the greenback, as global demand for the US currency is increasing, Exchange Companies Association data shows.
The State Bank of Pakistan (SBP) in an emergency move on Tuesday cut its policy rate by a further 150 basis points to 11 percent, after cutting it by 75 basis points on March 17. The move brought the cumulative monetary easing over the past week to 225 basis points.
Financial experts link the rupee depreciation with global trends, outflows of foreign funds from Pakistan’s capital market, and domestic trade contraction.
“The US currency has appreciated by 5-25 percent against other currencies of emerging markets while our currency has depreciated 6 percent in March. There is outflow of hot money and our trade and remittance are also disturbed,” Muzamil Aslam, senior economic and financial analyst, told Arab News.
Foreign investors have withdrawn $1.8 billion from Pakistan’s capital market since July 2019. On Wednesday, no investment was made in government papers but an outflow of $80 million was recorded, State Bank of Pakistan data showed.
Pakistan attracted $4.1 billion in its equity and debt market, the major share of inflows or hot money was invested in short-term government papers as the short term papers of three months maturity offered ate as high as 13.38 percent returns.
Analysts expect the rupee will stabilize as the government has decided to stop importing petroleum products in April. Pakistan has spent $8.23 billion petroleum product imports between July 2019 and February this year, according to the Federal Bureau Statistics.


Pakistanis in Dubai rally support for compatriots affected by virus layoffs

Updated 27 March 2020

Pakistanis in Dubai rally support for compatriots affected by virus layoffs

  • Scores of Pakistani workers in UAE are left without means to earn a living
  • Many Pakistanis remain stranded in the UAE following the suspension of international flights

DUBAI: The Pakistani community in Dubai is rallying to support for fellow nationals in the United Arab Emirates who have been affected by the economic slowdown resulting from the coronavirus pandemic.
The suspension of international flights last week left many Pakistanis stranded in the UAE, while shutdowns of businesses see scores of Pakistani workers without means to earn a living, as they have been laid off by their companies.
Sharjah-based teacher Ayesha Sohail, who runs an online group for women, UAE Fusion Socialites, said many of its 19,400 members have been sending her messages asking for help.
“Many of them are families whose breadwinners have been laid off by companies that have started downsizing. Others need help because they are here on visit visas and have been stranded,” she told Arab News.
Sohail shared the appeals for help with other members of the group who started to gather packages of food and other staples. Many others have offered to give free lodging for the stranded nationals. Since cash donations by individuals are banned in the UAE, they are not encouraged in the group.
“Since we are in isolation, we do not encourage people to come to pick up the packets. Instead, me or my husband drop the packets off at places where they can be easily accessed,” said the Karachi native who has been living in the UAE for the past 27 years. Twenty Pakistani families have already received support from the group's members.
Sohail is also offering counseling for women who need it. “These are depressing times and many people are turning to social media for guidance. Sometimes even that is not enough, so we come up with online games to keep everyone busy.”
Rizwan Fancy, director of community welfare at Pakistan Association in Dubai, said at this point the association could not run any campaigns to raise funds. “We are offering Dh300-worth vouchers to be used to buy essential items for those in need on a case-to-case basis,” he said.
They are also trying to support Pakistani children whose UAE schools have shifted to online learning.
“Since schools are now shut and children have to carry on learning from homes, it is important for them to have laptops to be connected, but unfortunately not everyone has them. So we are looking at cases individually and trying our best to provide them with whatever is possible,” he said. Until now, 10 laptops have been donated.
The Consulate General of Pakistan, with the help of community members, is also distributing food rations to those in need.
In a statement, the consulate said that those who want to help or know of any nationals who require assistance can contact the mission on WhatsApp 00971-56-3962911 or email: [email protected]