KARACHI: Pakistan’s national currency continued to lose its value against the US dollar and hit a new all-time low as the greenback closed at Rs176.20 on Monday.
The rupee has lost its value by 15.7 percent, or more than Rs24, since May this year, when the dollar was trading at around Rs152.
While analysts believe the rupee is weakening against the greenback due to a high demand for imports and an expectation of higher import bills for November 2021, currency dealers say the reasons for rupee’s depreciation were not clear, despite a decline in oil prices and the clearance of a Saudi financial package.
Pakistan and Saudi Arabia on Monday formally signed an agreement under which the Saudi Fund for Development (SFD) will deposit $3 billion in the State Bank of Pakistan (SBP).
In October, SFD announced a financial package of $4.2 billion to help the South Asian nation as it struggled with depleting foreign reserves. The package includes suppling $1.2 billion worth of oil to Pakistan on credit.
“The demand of dollar for imports is exerting pressure on Pakistani rupee besides it is expected that November import bill will be higher as well,” said Samiullah Tariq, research director at the Pakistan Kuwait Investment Company (PKIC).
Tariq said the flow of Saudi dollars into Pakistan would improve market sentiment despite an expected high demand for dollar for imports.
“The Saudi deposits will improve the sentiment of the market,” he said. “The deposit will increase the import coverage of the country for three months.”
But Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), said analysts were unable to comprehend why the dollar was appreciating in the interbank market, despite the clearance of the Saudi deposit facility and around 10 percent decline in oil prices.
On Monday, the rupee appreciated in the open market and the US dollar traded at Rs177.80 for selling and Rs177.30 for buying. The greenback traded at Rs179 for selling and Rs178 for buying the previous day.
“There is more supply of dollar than the demand in the open market,” Paracha said, explaining the rupee’s appreciation.
Pakistan’s equity market jubilated over the clearance of the Saudi deposit facility, with the benchmark KSE 100 index gaining 1215.89 points on Monday.
“Stocks closed record higher after reports that federal cabinet approved terms of $4.2 billion Saudi package,” Ahsan Mehanti, chief executive of Arif Habib Corporation said. “Strong economic outlook ahead of release of IMF tranche and surging exports, remittances and global crude oil prices played a catalyst role in the bullish close.”
Pakistani rupee hits new all-time low against greenback
https://arab.news/rx39c
Pakistani rupee hits new all-time low against greenback
- US dollar closed at Rs176.20 on Monday despite clearance of Saudi deposits
- Pakistani currency has lost 15.7 percent of its value since May this year
Pakistan’s Afghan salvo risks turning ‘open war’ into long crisis
- Nuclear-armed Pakistan has a formidable military of 660,000 active personnel, backed by a fleet of 465 combat aircraft
- But the Taliban have the option to lean on insurgent groups like the TTP and the BLA to move beyond border skirmishes
KARACHI: Weeks after the Taliban’s lightning offensive in 2021 wrested control of Afghanistan from a US-led military coalition, Pakistan’s then intelligence chief flew into the capital Kabul for talks, where the serving lieutenant general told a reporter: “Don’t worry, everything will be okay.”
Five years on, Islamabad — long seen as a patron of the Taliban — is locked in its heaviest fighting with the group, which Pakistan’s Defense Minister Khawaja Muhammad Asif described on Friday (February 27) as an “open war.”
The turmoil means that a wide swathe of Asia — from the Gulf to the Himalayas — is now in flux, with the United States building up a military deployment against Afghanistan’s neighbor Iran even as relations between Pakistan and arch rival India remain on edge after four days of fighting last May.
At the heart of the conflict with Afghanistan is Pakistan’s accusation that the Afghan Taliban provides support to militant groups, including the Tehreek-e-Taliban Pakistan (TTP), that have wreaked havoc across inside the South Asian country.
The Afghan Taliban, which has previously fought alongside the TTP, denies the charge, insisting that Pakistan’s security situation is its internal problem.
The disagreement is a reflection of starkly incompatible positions taken by both sides, as Pakistan expected compliance after decades of support to the Taliban, which did not see itself beholden to Islamabad, analysts said.
“We all know that the government in Pakistan supported the Taliban, the Afghan Taliban for many years, in the 90s and the 2000s, and provided havens to them during the period where the US and NATO were in Afghanistan.
So there’s a very close relationship between the Taliban and Pakistan,” said Jennifer Brick Murtazashvili, a political scientist at the University of Pittsburgh and an Afghanistan expert.
“It’s really surprising and shocking to many of us to see how quickly this relationship deteriorated,” she said.
Although tensions have simmered along their rugged 2,600-km (1,615-mile) frontier for months, following clashes last October, Friday’s fighting is notable because of Pakistan’s use of warplanes to hit Taliban military installations instead of confining the attacks to the militants it allegedly harbors.
These include targets deep inside the country in Kabul, as well as the southern city of Kandahar, the seat of Taliban supreme leader Hibatullah Akhundzada, according to Pakistan military spokesman Lt. Gen. Ahmed Sharif Chaudhry.
The clashes are unlikely to end there.
“I think in the immediate aftermath, I think hostilities will subside. There will be, I hope there will be a ceasefire through mediation. But I do not see these tensions subsiding in the foreseeable future,” said Abdul Basit, an expert on militancy and violent extremism at Singapore’s S. Rajaratnam School of International Studies.
Nuclear-armed Pakistan has a formidable military of 660,000 active personnel, backed by a fleet of 465 combat aircraft, several thousand armored fighting vehicles and artillery pieces.
Across the border, the Afghan Taliban has only around 172,000 active military personnel, a smattering of armored vehicles and no real air force.
But the battle-hardened group, which took on a phalanx of Western military powers in 2001 and outlasted them, has the option to lean on insurgents like the TTP and the Baloch Liberation Army (BLA), moving beyond border skirmishes.
Based in Pakistan’s largest and poorest province of Balochistan that borders both Iran and Afghanistan, the BLA has been at the center of a decades-long insurgency, which in recent years has staged large coordinated attacks.
Pakistan has long accused India of backing the insurgents, a charge repeatedly denied by New Delhi, which has retained a robust military deployment along the border since last May.
Although a raft of countries with influence — including China, Russia, Turkiye and Qatar — have indicated an openness to help mediate the conflict, all such efforts have been met with limited success so far.
