KARACHI: Pakistan’s national currency slid against the US dollar on Friday as the country’s foreign currency reserves continued to deplete during the outgoing week due to year-end payment settlements, said dealers and analysts.
The Pak rupee lost its value by 1.5 percent in the last seven days. It depreciated to Rs 176 against the American currency on Friday before closing at Rs 166.70.
“The rupee is under pressure due to a surge in the demand for US dollars. This is understandable since we have almost reached the end of the financial year when most payments are squared by companies ahead of their closings,” Samiullah Tariq, head of research at the Pakistan-Kuwait Investment, told Arab News.
“The declining exports and remittances are key reasons for the unstable supply of the US dollar,” he added.
Pakistan’s exports declined by 33 percent to $1.4 billion in May 2020 as compared to the same period last year, though they increased by 46 percent when compared to the situation in April 2020.
The county also suffered a loss of 18.6 percent due to a decline in its remittances. The reduction in the money inflow from abroad was caused by job losses of overseas workers and closure of international borders due to the coronavirus pandemic.
Analysts said that currencies of other countries had also come under pressure since a decline in exports and flight of capital from regional markets had resulted in an environment of overall economic instability.
“The flight of capital was witnessed in the regional market as investors looked for safe heavens like the United States and Europe,” Tariq noted.
Due to the outbreak of COVID-19, the rupee depreciated by 3.9 percent in just one month during July-March FY2020, official statistics indicate.
Dealers maintained the pressure on the country’s national currency was likely to ease after the end of the current fiscal year on June 30, 2020.
“Due to the COVID-19 pandemic, Pakistan’s petroleum imports were halted. Now the companies are opening LCs [Letters of Credit] which is also exerting pressure on our currency. As soon this process comes to an end, the demand for dollar will normalize,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan, told Arab News.
He added that the national currency would further stabilize if the government’s negotiations with friendly countries for the conversion of short-term deposits into long-term loans materialized.
Earlier this month, Dr. Abdul Hafeez Shaikh, the prime minister’s adviser on finance and revenue, told Arab News in an exclusive interview that Pakistan was in talks with Saudi Arabia, the United Arab Emirates and China to convert the $7.7 billion short-term deposits into longer tenors.
Last year, when Pakistan was going through its worst balance of payments crisis, Islamabad approached these friendly countries for financial assistance. As a result, the country received $7.7 billion in short-term deposits through bilateral arrangements which provided it the much needed economic support.
Pakistan’s currency slides against US dollar ahead of year-end settlements
https://arab.news/634v3
Pakistan’s currency slides against US dollar ahead of year-end settlements
- The country’s national currency lost 1.5 percent of its value during this week amid a decline in exports and remittances, say analysts
- Experts believe the situation will improve after the end of the current fiscal year
Pakistan says Iraq expressed ‘keen interest’ in JF-17 jets at air chiefs meeting
- Pakistan’s defense sector has drawn growing interest and investment since a four-day standoff with India in May last year
- Many countries have since increased defense engagement, while multiple others have proposed learning from Pakistan’s expertise
ISLAMABAD: Pakistan’s military said on Saturday that Iraq had shown “keen interest” in its JF-17 Thunder and Super Mushshak aircraft at a meeting between chiefs of the two air forces.
Pakistan’s Air Chief Marshal Zaheer Ahmed Baber Sidhu called on Lt. Gen. Staff Pilot Mohanad Ghalib Mohammed Radi Al-Asadi, commander of the Iraqi Air Force, during his official visit to Iraq.
The Pakistani air chief was accorded a guard of honor at the Iraqi Air Force headquarters, symbolizing the strong bond of mutual respect, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.
“Discussions focused on enhancing bilateral military cooperation, with emphasis on joint training, capacity-building and improving operational cooperation,” the ISPR said.
“The Iraqi Air Chief praised PAF’s professionalism and technological advancement, expressed interest in benefiting from PAF’s world-class training and expressed keen interest in JF-17 Thunder fighter jets, Super Mushshak trainer aircraft.”
Pakistan’s defense sector has drawn growing interest and investment, particularly since a four-day India-Pakistan military standoff in May last year. Islamabad claimed victory in the standoff, saying it had shot down six Indian aircraft, including French-made Rafale jets. India acknowledged losses but did not specify a number.
Many countries have since stepped up defense engagement with Pakistan, while delegations from multiple other nations have proposed learning from Pakistan Air Force’s multi-domain air warfare capabilities that successfully demonstrated how advanced Chinese military technology performs against Western hardware.
Pakistan markets the Chinese co-developed JF-17 as a lower-cost multi-role fighter and has positioned itself as a supplier able to offer aircraft, training and maintenance outside Western supply chains.
Islamabad is in the final phases of striking a $1.5-billion deal to supply weapons and jets to Sudan in a major boost for Sudan’s army that has been battling the paramilitary Rapid Support Forces, Reuters reported this week, citing a former top air force official and three sources.
The South Asian country reached a deal worth over $4 billion to sell military equipment to the Libyan National Army, Reuters report last month, citing Pakistani officials. The deal, one of Pakistan’s largest-ever weapons sales, included the sale of 16 JF-17 fighter jets and 12 Super Mushshak trainer aircraft for basic pilot training.
