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Express Tribune
06-08-2025
- Business
- Express Tribune
Rupee rallies for 10th straight session
Listen to article The Pakistani rupee extended its gains against the US dollar on Tuesday, appreciating by 0.03% in the inter-bank market. The currency closed at 282.57, up by nine paisa from Monday's close at 282.66. The rupee has strengthened by Rs2.40 against the US dollar over the past 10 trading sessions, according to a report of AKD Research. However, on a calendar year-to-date basis, the rupee has depreciated by 1.42%, while it has gained 0.42% in the fiscal year to date, according to data from Insight Securities. Moreover, the State Bank of Pakistan (SBP) has announced its auction calendar for the August-October 2025 period, setting a target to raise Rs6.175 trillion through domestic debt instruments. The plan includes borrowing of Rs3.675 trillion through Market Treasury Bills (MTBs) and Rs2.5 trillion via Pakistan Investment Bonds (PIBs), as part of the government's broader strategy to meet its fiscal needs and manage market liquidity. According to the SBP, seven MTB auctions are scheduled for the three-month period, with targets ranging from Rs225 billion to Rs700 billion per auction. These auctions are set for August 6, August 20, September 3, September 17, October 1, October 15 and October 29. The MTBs will be issued in tenors of one, three, six and 12 months, with allocations of Rs575 billion, Rs925 billion, Rs925 billion and Rs1.25 trillion, respectively. On a long-term basis, the SBP plans to raise Rs2.5 trillion through PIBs. This includes Rs1.1 trillion via fixed-rate bonds and Rs1.4 trillion through floating-rate bonds. The fixed-rate PIB auctions are scheduled for August 1, September 4 and October 14, with targets of Rs300 billion, Rs400 billion and Rs400 billion, respectively. These bonds will be issued for two, three, five, 10 and 15-year tenors. Floating-rate PIBs, all having 10-year maturity, will be auctioned semi-monthly from August 6 to October 29. Each auction aims to raise between Rs150 billion and Rs250 billion. The SBP's aggressive borrowing plan reflects the government's continued reliance on domestic sources to fund its budget deficit, especially in light of the restriction put in place by the International Monetary Fund (IMF) that the government would not directly borrow from the SBP by printing new money, which adds to the already high inflation, even though this indirect borrowing also fuels inflation, but keeps things transparent. Meanwhile, gold prices in Pakistan fell on Tuesday, bucking the trend in international markets, where the precious metal held steady amid a stronger US dollar and expectations of Federal Reserve rate cuts. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola dropped by Rs1,500 to settle at Rs358,000. Similarly, the price of 10-gram gold declined by Rs1,286, closing at Rs306,927. The decline comes a day after domestic gold prices had risen, with the per-tola rate climbing by Rs500 on Monday to reach Rs359,500. Internationally, spot gold was up 0.1% at $3,376.80 per ounce by 0947 am ET (1347 GMT) after rising to its highest level since July 24 on Monday. US gold futures also rose 0.1% at $3,430.
Express Tribune
28-05-2025
- Business
- Express Tribune
SBP buys record $223m
Listen to article The State Bank of Pakistan (SBP) reported net foreign exchange (FX) interventions of $223 million in February 2025, bringing total cumulative purchases to $5.3 billion for the first eight months of FY25 (July 2024 to February 2025). As of the end of February, SBP's foreign exchange reserves stood at $11.25 billion. A trend analysis shows fluctuations in monthly interventions, with a peak of $1.156 billion in October 2024 and a low of $154 million in January 2025, underscoring the central bank's active role in managing the external account and maintaining reserves. "SBP conducted net FX interventions of $223m during the month of Feb'25, taking cumulative currency purchases to $5.3b during 8MFY25," noted AKD Research. In 2024 alone, Pakistan's central bank made record foreign exchange purchases exceeding $9 billion from the local market to boost its reserves, prompting mixed reactions. Exchange companies criticised the central bank for excessively favouring exporters without corresponding improvements in performance. They argued that without the SBP's interventions, the rupee might have appreciated to Rs240-250 per US dollar, providing relief to the general public. On Tuesday, the rupee depreciated by 0.04% day-on-day (DoD) to settle at 282.17 against the dollar, a loss of Rs0.11 from Monday's close of 282.06. The currency has weakened by 1.28% on a calendar year-to-date basis and 1.36% on a fiscal year-to-date basis. Additionally, on Tuesday, the SBP held an auction for the outright purchase of Government of Pakistan Ijara Sukuk (GIS) on a deferred payment (Bai Muajjal) basis. It accepted Rs53.7 billion against bids of Rs78.2 billion. In a separate auction of 10-year semi-annual Pakistan Investment Bonds (PIBs), the central bank received bids worth Rs699.9 billion against a target of Rs200 billionan oversubscription of 3.5 times. The SBP accepted Rs187.2 billion, setting the cut-off rate at 12.12% with a current spread of 0.869%, slightly down from the previous spread of 0.999%. Meanwhile, the T-bill auction attracted even stronger interest, with bids reaching Rs3.3 trillion against a target of Rs650 billion, according to Optimus Research. The SBP accepted Rs772 billion, with cut-off yields declining across all tenors: 1-month at 11.10% (down 15 basis points), 3-month at 11.15% (down 9 bps), 6-month at 11.18% (down 9 bps), and 12-month at 11.20% (down 15 bps). Gold prices also declined on Tuesday, in line with global trends. In the local market, the price per tola dropped by Rs3,600 to Rs347,900, while the 10-gram rate fell by Rs3,086 to Rs298,268, according to the All-Pakistan Gems and Jewellers Sarafa Association. A day earlier, the price per tola had dropped by Rs2,600 to Rs351,500. Globally, gold prices fell for the second straight session following improved risk sentiment after US President Donald Trump postponed tariffs on the European Union. Spot gold slipped 1.4% to $3,296.79 an ounce by 1301 GMT, according to Reuters.
