SBP reserves rise $167mn, clock in at $16.88bn
The total reserves held by the country stood at $16,875.0 million, up from $16,708.0 million a week earlier.
The central bank's reserves increased by $167 million during the week to reach $11,675.6 million, the SBP said in a statement. The rise is attributed to official inflows.
Meanwhile, net foreign reserves held by commercial banks were reported at $5,199.4 million.
Last week, SBP-held reserves had declined by $7 million on a weekly basis, reaching $11.51 billion as of May 30.
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Express Tribune
6 hours ago
- Express Tribune
Rupee extends momentum
The Pakistani rupee continued its upward momentum against the US dollar on Monday, appreciating by 0.02% in the inter-bank market. At the close of trading, the local currency was quoted at 282.66, marking a modest gain of six paisa. During the previous week, the rupee had advanced by 73 paisa, or 0.26%, closing at 282.72 compared with 283.45 a week earlier, according to data from the State Bank of Pakistan (SBP). AKD Securities noted that the rupee has strengthened by Rs2.31 against the greenback over the past nine trading sessions. On the global front, the US dollar edged slightly higher on Monday after suffering a blow last week from disappointing jobs data and political turbulence following President Donald Trump's dismissal of a top labour official. US Labour Department figures released on Friday showed job growth in July fell short of expectations, while non-farm payrolls for the previous two months were sharply revised downwards by 258,000, highlighting further weakness in the labour market and bolstering expectations of imminent interest rate cuts by the Federal Reserve. Meanwhile, gold prices in Pakistan rose, tracking gains in the international market, where the precious metal extended its upward momentum for a third consecutive session. The rally was driven by renewed expectations of interest rate cuts by the US Fed, following the release of softer economic data last week. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola increased by Rs500 to settle at Rs359,500. Meanwhile, the price of 10 grams rose by Rs429 to Rs308,213. The latest uptick comes after a sharp jump on Saturday, when gold surged by Rs6,100 per tola, reaching Rs359,000. Commenting on the market trend, Interactive Commodities Director Adnan Agar said gold prices continued to show strength. "Monday's high was $3,385 and the low at $3,344. The market was later hovering around $3,378. If it closes above $3,375-80, there is potential for gold to test $3,440-50 levels again," he said. He added that Friday's economic data came out in favour of gold, boosting sentiment and triggering a recovery in global prices. "If gold maintains its strength and closes above key levels, further upside is likely in the coming sessions," Agar noted. Spot gold rose 0.3% to $3,373.22 per ounce as of 1315 GMT, its highest level since July 24. US gold futures gained 0.8% to $3,427.10. "The odds are stronger now for a rate cut in September and even stronger for another rate cut in December. That, coupled with the headwinds of inflation, I think, is pretty bullish for gold," said Daniel Pavilonis, Senior Market Strategist at RJO Futures.
Express Tribune
6 hours ago
- Express Tribune
PM restarts remittance subsidy
The federal government has decided to initially provide a Rs30 billion supplementary grant to resume subsidies for foreign remittances, indicating a lack of proper consultation among stakeholders before the finance ministry dropped the subsidies from the budget in June. Government sources told The Express Tribune that the finance ministry has conceded to the central bank's demand for subsidies under the Pakistan Remittances Initiative from the budget. However, the ministry agreed only after Prime Minister Shehbaz Sharif ordered it to urgently disburse funds for the scheme. Finance ministry officials said the scheme would now be fully funded, and in the first phase, about Rs30 billion could be approved very soon by the Economic Coordination Committee (ECC) of the Cabinet. The officials said that since there was no allocation in the budget, the money would be taken out of the contingency fund, which the federal government has retained to meet unforeseen expenses. Once the Rs30 billion is exhausted, further allocations will be made during the course of the fiscal year, they added. In the last fiscal year, the finance ministry had allocated Rs87 billion for the subsidies. But against the Rs87 billion allocation, the central bank had billed Rs200 billion to the Ministry of Finance. Of the total cost, around 85%, or Rs170 billion, was under the Telegraphic Transfer (TT) Charges Scheme. Due to the growing cost of subsidies, the finance ministry discontinued budgetary allocations and instead asked the central bank to fund the scheme, as maintaining foreign exchange reserves was the SBP's responsibility. Last month, Special Secretary Finance Nasheeta Mohsin told the Senate Standing Committee that "we are very clear that there is no money in the new budget for the Pakistan Remittances Initiative and the central bank will have to find the funding sources." But the central bank also informed the government last month that under the International Monetary Fund (IMF) programme, it cannot offer any kind of subsidies. "Overseas Pakistanis are our strength and valuable assets, and their hard-earned remittances play a vital role in Pakistan's development," said PM Sharif last week while ordering the finance ministry to resume subsidies. Sources said that SBP Governor Jameel Ahmad stated in one of the meetings that due to the discontinuation of subsidies, the flow of remittances had dropped in double digits during the first half of July. However, finance ministry officials said the slowdown in remittances could be seasonal and should not be attributed solely to the discontinuation of the scheme. SBP data shows that remittances reached a historic high of $38.3 billion in the fiscal year 202425, a 27% increase from $30.25 billion in the previous year. But the finance ministry viewed it as a Rs200 billion subsidy burden. The government has not been able to substantially increase exports, which barely touched $32 billion in the last fiscal year. Remittances helped ease pressure on foreign exchange reserves. Any slowdown in remittances may further pressure the rupee, which in recent days has started appreciating due to official intervention in the market. The ministry also had genuine concerns that financial institutions were breaking one remittance transaction into many to claim more financial benefits, and there was a need to scrutinise the payments. Acting Deputy Governor of the central bank Dr Inayat Hussain also cautioned last month that the government's decision to curtail subsidies for promoting foreign remittances may reduce the flow of these payments through banking channels. The federal cabinet has already approved a substantial reduction in remittance incentives. Following the revised scheme, the central bank issued changes that significantly reduced benefits for banks and exchange companies. The government doubled the minimum eligible transaction size to $200 and introduced a flat rebate rate of Saudi Riyal 20 per eligible transaction, effective July 1, 2025. The old rate ranged from 20 SAR to 35 SAR, which has now been cut by 43%. The TT Charges Scheme offers a zero-cost and free transfer model to the sender and receiver for eligible remittance transactions. The old model offered 20 SAR reimbursement for every transaction worth $100 and above, an additional incentive of up to 10% on growth over the previous year, and a further incentive of SAR 7 for growth exceeding 10% over the previous year. The federal government also decided that a mechanism should be established to gradually phase out the Remittance Incentive Schemes. In that regard, the SBP has been asked to propose and present an evidence-based plan factoring in a cost-benefit analysis of existing schemes, Raast integration with Buna and SAMA gateways, and strengthened controls on transferring remittances through formal channels. The government has also abolished the Exchange Companies Incentive Scheme (ECIS), under which these companies were receiving up to Rs4 per dollar as a government subsidy.
Business Recorder
16 hours ago
- Business Recorder
Rupee strengthens further against US dollar
Rupee's Performance Against US Dollar Since 04 March 2025 The Pakistani rupee maintained its upward trajectory against the US dollar, appreciating 0.02% during trading in the inter-bank market on Monday. At close, the currency settled at 282.66, a gain of Re0.06. During the previous week, rupee gained further against the US dollar in the inter-bank market as it appreciated by Re0.73 or 0.26%. The local unit closed at 282.72, against 283.45 it had closed the week earlier against the greenback, according to the State Bank of Pakistan (SBP). Internationally, a battered US dollar edged marginally higher on Monday after a dismal US jobs report and President Donald Trump's firing of a top labour official stunned investors and led them to ramp up bets of imminent Federal Reserve rate cuts. Data on Friday showed US employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Adding to headwinds for markets, Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer the same day, accusing her of faking the jobs numbers. An unexpected resignation by Fed Governor Adriana Kugler also opened the door for Trump to make an imprint on the central bank much earlier than anticipated. Trump has been at loggerheads with the Fed for not lowering interest rates sooner. The barrage of developments dealt a one-two punch to the dollar, which sank more than 2% against the yen and roughly 1.5% against the euro on Friday. The greenback recovered some of its losses against the Japanese currency on Monday, last trading 0.14% higher at 147.60 yen. The euro fell 0.2% to $1.1560 , while sterling eased 0.1% to $1.3263. Against a basket of currencies, the dollar edged up 0.2% to 98.86, after sliding more than 1% on Friday. Oil prices, a key indicator of currency parity, extended declines on Monday after OPEC+ agreed to another large production hike in September, with concerns about a slowing economy in the US, the world's biggest oil user, adding to the pressure. Brent crude futures fell 40 cents, or 0.57%, to $69.27 a barrel by 0115 GMT while US West Texas Intermediate crude was at $66.96 a barrel, down 37 cents, or 0.55%, after both contracts closed about $2 a barrel lower on Friday.
