ISLAMABAD: Pakistan’s national currency on Friday continued its losing streak, with the US dollar closing at Rs186 ahead of Pakistan’s talks with the International Monetary Fund (IMF) for the revival of a $6 billion loan program.
The rupee lost its value by 0.50 percent and the greenback closed at Rs186.63 in the interbank market. The development comes as the country faces a soaring current account and trade deficits, and dwindling foreign exchange reserves.
Pakistan’s economy is facing inflationary pressures from imported commodities, while inflation in the South Asian nation rose to 13.4 percent in April, the highest since January 2021, after staying under 13 percent during the previous two months.
“The government must impose a complete ban on the import of all things except food items, at least for a year, to save foreign exchange,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), told Arab News.
He said the government must withdraw subsidies to oil and electricity sectors, adding Pakistan was spending around $2.5 billion a month on energy imports. These, he said, included petroleum products and liquefied natural gas (LNG).
Bostan said Pakistan was bearing a heavy import bill of $5 billion per month from Kabul since the Taliban took over in August 2021. He urged the government to review its trade policy regarding Afghanistan.
“We are paying in dollars for Afghanistan’s imports while they reimburse us in rupees,” he explained. “This model isn’t sustainable.”
Pakistan was set to give more than $2 billion in subsidies to oil and power sectors from April till June, which was announced by former prime minister Imran Khan during his last days in power.
Prime Minister Shehbaz Sharif’s government is retaining the subsidies against the IMF’s recommendations to maintain fuel and power prices for consumers.
An IMF mission is due to arrive in Pakistan this month to resume discussions over policies to complete the seventh review of the country’s $6 billion Extended Fund Facility secured in 2019. Islamabad has requested the global lender to boost the loan size to $8 billion to meet its balance-of-payment requirements.
If Islamabad clears the review, Pakistan will get an estimated $1 billion, which would in turn unlock additional external funding.
Haroon Sharif, a former economic adviser, suggested the government look toward foreign investment rather than loans to stabilize the volatile economy.
“We should offer shares of our profit-making enterprises to friendly countries to boost our foreign exchange reserves,” he told Arab News.
Sharif suggested the government should try to boost value-added exports through “massive incentives” and cut down imports of all luxury items.
“The next financial year is going to be very tough for Pakistan if we fail to manage our ballooning import bill,” he added.
Pakistani rupee continues to slide ahead of IMF-Islamabad talks
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Pakistani rupee continues to slide ahead of IMF-Islamabad talks
- Pakistani currency lost its value by 0.50 percent in the interbank market on Friday
- Economists urge government to cut imports of luxury items to save foreign exchange
Pakistan stocks hit another all-time high as optimism prevails over worker remittances
- Pakistan recorded an inflow of $3.6 billion in Dec., with officials expecting remittances to exceed $40 billion this fiscal year
- ENGROH, PPL, SAZEW, OGDC and PSO collectively added 661 points as the benchmark KSE-100 index rose by 860 points
ISLAMABAD: The Pakistan Stock Exchange (PSX) hit a another all-time high as it crossed 188,000 points on Tuesday, amid hopes of strong remittance inflows and budget relief linked to the International Monetary Fund (IMF) talks.
Pakistan recorded an inflow of $3.6 billion in December, with Saudi Arabia emerging as the largest contributor. Pakistani officials expect remittances to exceed $40 billion this fiscal year.
On Tuesday, the benchmark KSE-100 index gained 860.09 points, or 0.46 percent, to close at 188,621.78 points, up from the previous close of 187,761.69 points, according to PSX data.
Ahsan Mehanti, chief executive officer of Arif Habib Commodities, told Arab News the market witnessed bullish activity amid speculation of the earnings season.
“FM (finance minister) expectations for $41 billion remittances in FY26, and expectations over renegotiation of IMF deal for relief in federal budget played a catalyst role in the record close at PSX,” he said.
Pakistan is currently navigating a long path to economic recovery under a $7 billion Extended Fund Facility (EFF) approved in Sept. 2024, which has seen Islamabad take several reforms, including privatization of loss-making state entities.
Meanwhile, Pakistani market research firm Topline Securities said in its daily review that the upward momentum at PSX was driven by buying from local mutual funds.
“Additionally, SAZEW [Sazgar Engineering Works Limited] notified that it will commence bookings for its CKD [Completely Knocked Down models] — ‘TANK-500 Hi4-T 4x4 2.0L Turbo AT PHEV and HEV’ — starting Monday, January 26, 2026,” Topline Securities Senior Equity Trader Naveed Nadeem said.
CKD means the cars are assembled locally from imported parts.
Engro Holdings Limited (ENGROH), Pakistan Petroleum Limited (PPL), SAZEW, Oil & Gas Development Company Limited (OGDC), and Pakistan State Oil (PSO) collectively added 661 points to the index, according to the research firm.
It said a total of 1,222 million shares were traded at a value of $227.86 million (Rs63.8 billion) on Tuesday, with Hascol Petroleum Limited topping the volume chart by trading 113 million shares.
