{"id":16318,"date":"2022-07-28T07:38:43","date_gmt":"2022-07-28T07:38:43","guid":{"rendered":"https:\/\/undergroundnews.co.uk\/?p=16318"},"modified":"2022-07-28T07:38:45","modified_gmt":"2022-07-28T07:38:45","slug":"dollar-dearth-creates-dislocation-in-pakistans-foreign-exchange-market","status":"publish","type":"post","link":"https:\/\/undergroundnews.co.uk\/?p=16318&lang=en","title":{"rendered":"Dollar dearth creates dislocation in Pakistan\u2019s foreign exchange market"},"content":{"rendered":"\n<p><strong>Mishaal Arshad C.M Underground News<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><br>Banks giving dollars at premium to interbank, Tresmark says.<\/strong><\/li><li><strong>Economy is seeing stress amid delay in IMF programme.<\/strong><\/li><li><strong>Pakistan is facing severe shortage of greenback.<\/strong><\/li><\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-cnvs-separator-id-1658993451076\"\/>\n\n\n\n<p>Banks are offering different rates than the interbank market as the shortage of US dollar in the country is creating a dislocation in the foreign exchange market of Pakistan,\u00a0<em>Bloomberg\u00a0<\/em>reported.<\/p>\n\n\n\n<p>Tresmark \u2014 a financial portal for treasury markets \u2014 noted that banks are offering higher spreads than the interbank market for import and export transactions as they are unable to cover import payments.<\/p>\n\n\n\n<p>The financial portal has launched a new ticker to track the new rupee rate.<\/p>\n\n\n\n<p>Pakistan is facing severe shortage of the greenback as a delay in the International Monetary Fund (IMF) bailout programme has raised concerns that the country could follow Sri Lanka into a default this year.<\/p>\n\n\n\n<p>To curb dollar outflow, the coalition government also banned several imports that has resulted in a parts shortage at\u00a0<a href=\"https:\/\/www.geo.tv\/latest\/430094-toyota-suzuki-to-partially-shut-pakistan-output-over-forex-shortage-issues\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Toyota and Suzuki\u2019s local units<\/strong><\/a>\u00a0\u2014 who now plan to stop production for multiple days next month. Meanwhile, amid worsening external finances, the\u00a0<a href=\"https:\/\/www.geo.tv\/latest\/429997-rupee-dives-even-lower-as-fears-over-pakistans-faltering-economy-increase\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>local currency<\/strong><\/a>\u00a0saw its biggest drop since 1998 last week.<\/p>\n\n\n\n<p>Raheel Ahmed, chief executive officer at VN Lakhani and Co, a Karachi-based steel importer, told\u00a0<em>Bloomberg\u00a0<\/em>that banks last week provided dollars to energy companies at about an 8% higher rate than the official closing rate.<\/p>\n\n\n\n<p>\u201cImporters who used to get dollars in a day for overseas payments are now facing a delay of more than a week,\u201d he added.<\/p>\n\n\n\n<p>Earlier, sources told the publication that the State Bank of Pakistan (SBP) is discouraging interbank trading due to a severe shortage of dollars. The currency has tested a series of record lows and is down more than 30% this year.<\/p>\n\n\n\n<p>The\u00a0<a href=\"https:\/\/www.geo.tv\/latest\/429667-sbp-discourages-interbank-trading-to-contain-dollar-shortage\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>SBP has stepped up measures<\/strong><\/a>\u00a0to preserve foreign reserves. It asked commercial lenders to manage import-payment requests from their own inflows, such as exporter accruals and remittances.<\/p>\n\n\n\n<p>However,\u00a0<a href=\"https:\/\/www.geo.tv\/latest\/429987-no-risk-of-default-pressure-on-rupee-to-end-in-few-weeks-miftah\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Federal Minister for Finance and Revenue Miftah Ismail<\/strong><\/a>\u00a0said that the rupee depreciation is expected to \u201cvanish\u201d soon.<\/p>\n\n\n\n<p>\u201cIn a couple of weeks, you will see that the nation\u2019s inflow of dollars will be more than the value of the country\u2019s imports,\u201d Miftah Ismail said in a discussion with think-tank Tabadlab on July 26. \u201cOnce that happens, pressure on the rupee will vanish.\u201d<\/p>\n\n\n\n<p>Pakistan is expected to receive $1.2 billion funding in late August after the IMF\u2019s board meeting on the 24th of the month. It also anticipates another $4 billion in financing from bilateral countries, including Saudi Arabia.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Mishaal Arshad C.M Underground News Banks giving dollars at premium to interbank, Tresmark says. Economy is seeing stress&hellip;\n","protected":false},"author":3,"featured_media":16132,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"csco_singular_sidebar":"","csco_page_header_type":"","csco_appearance_grid":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"footnotes":""},"categories":[50,76,71,34],"tags":[],"class_list":{"0":"post-16318","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"category-important-news","9":"category-latest-news","10":"category-world","11":"cs-entry","12":"cs-video-wrap"},"_links":{"self":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16318"}],"version-history":[{"count":1,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16318\/revisions"}],"predecessor-version":[{"id":16322,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16318\/revisions\/16322"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/media\/16132"}],"wp:attachment":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}