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Express Tribune
12 hours ago
- Business
- Express Tribune
SBP injects Rs12.38 trillion
Listen to article The State Bank of Pakistan (SBP) injected Rs12.38 trillion into the financial system through two separate Open Market Operations (OMOs) on June 27, 2025, to manage the liquidity vacuum caused by Eid-related cash demand and fiscal needs of the government constrained by International Monetary Fund (IMF) conditions. The larger of the two was a conventional reverse repo OMO, in which SBP accepted Rs12.20 trillion out of Rs12.42 trillion offered by banks at a rate of 11.07% for a seven-day tenor. A total of 34 bids were accepted out of 36 received, with rates ranging between 11.20% and 11.04%. Additionally, a Shariah-compliant Mudarabah-based OMO saw the SBP accept Rs178 billion out of Rs326 billion offered at a slightly higher rate of 11.13% for the same tenor. Only two bids were received and accepted, showing limited participation from Islamic financial institutions. Analysts attributed the rise in OMO stock to higher currency in circulation during Eid (a temporary effect) and a lag between debt repayments and incoming inflows. They expect OMO levels to ease as inflows materialise in the coming weeks. In the currency market, the Pakistani rupee slightly weakened against the US dollar on Friday, falling by 0.02% in the interbank market. By day's end, the rupee closed at 283.72, down five paisas from Thursday's close of 283.67. Meanwhile, gold prices in Pakistan also saw a steep decline, mirroring a global drop of nearly 2% after confirmation of a US-China trade agreement boosted investor risk appetite and reduced demand for safe-haven assets. According to the All-Pakistan Gems and Jewellers Sarafa Association, the per tola gold price dropped by Rs5,000 to Rs351,000, while the 10-gram price fell Rs4,287 to Rs300,925. This came after gold gained Rs1,335 per tola the previous day, reaching Rs356,000. Adnan Agar, Director at Interactive Commodities, said gold hit a new intra-day low on Friday. "Gold touched a low of $3,255 and is now trading around $3,276 after opening at $3,320," he said, adding that, "The trend remains bearish, with potential downside targets near $3,213 before any short-term rebound." He added that confirmation of a US-China trade deal has dampened gold's momentum, and if similar agreements emerge with other major economies like the European Union, gold could revisit levels between $3,000 and $2,800 in the medium term. "Sentiment is currently tilted towards the downside, and the market may continue to face pressure into next week," Agar said.
Express Tribune
3 days ago
- Business
- Express Tribune
Gold flat as safe-haven demand cools
Gold prices in Pakistan remained largely flat on Wednesday, mirroring global trends where prices eased due to reduced safe-haven demand following signs of de-escalation between Israel and Iran. Investors also remained cautious ahead of upcoming US economic data. In the domestic market, the price of gold rose slightly by Rs300 to settle at Rs354,665 per tola, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). The price of 10-gram gold increased by Rs258 to Rs304,068. This marginal recovery comes after a sharp drop on Tuesday, when gold fell by Rs3,800 per tola. Interactive Commodities Director Adnan Agar noted that international gold prices touched the high of $3,337 an ounce and low of $3,311 on Wednesday, with current levels hovering around $3,323. "The overall sentiment is weak," he said. Gold is holding support between $3,300 and $3,290, but if it fails to break above $3,340, "we could see further downside". A close below $3,290 might push the market towards $3,200. He added that with geopolitical tensions easing, particularly on the Israel-Iran front, the near-term outlook for gold appears bearish, though a bounce may be possible after further correction. Internationally, spot gold was down 0.3% at $3,314.45 per ounce at 0934 am EDT (1334 GMT) after prices hit their lowest in over two weeks in the previous session, according to Reuters. US gold futures fell by 0.2% to $3,328.10. Meanwhile, the Pakistani rupee recorded a slight gain against the US dollar in the inter-bank market on Wednesday, appreciating by 0.02%. By the end of trading, the local currency closed at 283.72, up by five paisa from Tuesday's close at 283.77. Govt raises Rs467b via T-bills, bonds To support its financing needs, the government raised a total of Rs466.67 billion through auctions of Market Treasury Bills (MTBs) and Pakistan Investment Bonds – Floating Rate (PFL) on Wednesday, according to the State Bank of Pakistan (SBP). In the MTBs auction, the SBP raised Rs322.59 billion across four tenors. The breakdown includes Rs14.02 billion from one-month bills, Rs95.89 billion from three-month bills, Rs64.18 billion from six-month bills and Rs148.50 billion from 12-month bills. The auction saw competitive and non-competitive bids, with the total realised value slightly lower than the face value due to discount pricing. For 10-year PFL, the SBP raised Rs144.08 billion, which includes Rs142.80 billion from competitive bids and Rs1.28 billion in accrued interest. The bonds were issued at a cut-off price of Rs95.1982 million, with an additional Rs5.55 billion accepted through non-competitive bids. The auctions reflect strong market participation, with the MTBs contributing the majority (69%) of the total funds raised, while the PFL accounted for the remaining 31%.
Express Tribune
3 days ago
- Business
- Express Tribune
Gold prices tumble on Israel-Iran ceasefire
Listen to article Gold prices in Pakistan registered a sharp decline on Tuesday, mirroring the downtrend in the international market where bullion slipped nearly 2% to hit a more than two-week low as geopolitical tensions cooled. The global drop came as investor demand for safe-haven assets eased following Trump's announcement of a ceasefire between Iran and Israel. In the domestic market, the price of 24-karat gold fell by Rs3,800 per tola to settle at Rs354,365, according to rates issued by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). Similarly, the price of 10-gram gold dropped by Rs3,258 to reach Rs303,810. On the previous day, gold had posted a modest decline of Rs300 per tola, closing at Rs358,165. "There had been talk of a correction for several days and with tensions easing, the metal is now gradually retreating," said Adnan Agar, Director at Interactive Commodities, noting that gold was trading lower after geopolitical tensions subsided. Gold touched a high of $3,357 an ounce and a low of $3,303 on Tuesday and is still hovering near its lower range. The key support zone lies between $3,300 and $3,290. "A breach below this level could push the market down towards $3,200," he said. Agar indicated that if the geopolitical situation remains stable, gold prices may continue their downward correction, potentially sliding to $3,000 or even $2,800. Meanwhile, the Pakistani rupee registered a slight gain against the US dollar in the inter-bank market on Tuesday, appreciating by 0.04%. By the close of trading, the local currency settled at 283.77 against the greenback, marking an improvement of 10 paisa from the previous session's close at 283.87. In the global market, the US dollar weakened while the Australian and New Zealand dollars strengthened after US President Donald Trump announced a ceasefire deal between Israel and Iran. The development boosted investor sentiment and triggered a risk rally across international markets. Moreover, Pakistan's broad money (M2) grew by 0.9% on a week-on-week (WoW) basis to Rs38.4 trillion as of June 13, 2025, according to data released by the State Bank of Pakistan (SBP). The increase was mainly driven by a 1% WoW rise in total deposits with banks, which climbed to Rs27.5 trillion. Meanwhile, currency in circulation (CIC) edged higher by 0.7% WoW, standing at Rs10.9 trillion. On a month-on-month (MoM) basis, the broad money expanded by 3.2% while year-on-year (YoY) growth stood at 11.6%. So far in 2025, M2 has posted an increase of 7.9%. Currency in circulation surged 5.3% MoM and 17.4% YoY, reflecting higher cash demand after Eid holidays. Total deposits grew 2.3% MoM and 9.6% YoY during the period. Other deposits with the SBP, however, declined 3.2% WoW and 13% MoM, marking a sharp 30.6% fall on a yearly basis.
Express Tribune
19-06-2025
- Business
- Express Tribune
Foreign exchange reserves top $17b
The central bank said in its latest weekly update on Thursday that the country's foreign exchange reserves, held by the SBP, decreased $66 million to $8.15 billion in the week ended January 5, 2024 due to debt repayments. photo: file Listen to article Pakistan's total liquid foreign exchange reserves rose to $17.1 billion as of June 13, 2025, according to data released by the State Bank of Pakistan (SBP) on Thursday. During the week ended June 13, SBP-held reserves increased $46 million, reaching $11.7 billion. Meanwhile, net foreign reserves held by commercial banks stood at $5.3 billion. The increase in reserves is due to continued foreign inflows and central bank's purchases of dollars from local market. This has a dual impact on the economy. On the one hand, it provides cushion against upcoming external payment obligations and strengthens foreign currency reserves. On the other hand, it prevents the rupee from becoming stronger. In fact, the rupee has recently been on a downward trajectory, losing three rupees against the dollar in just one and a half month, reaching an 18-month low. Increasing imports and debt repayments are also the driving factors. This currency decline further erodes the already weak purchasing power of people. The State Bank reported net foreign exchange interventions of $223 million in February 2025, bringing cumulative purchases to $5.3 billion for the first eight months of FY25 (July 2024 to February 2025). On Thursday, the Pakistani rupee recorded a loss against the US dollar, slipping 0.03% in the inter-bank market. By the end of the session, the local currency stood at 283.64, down nine paisa compared to the previous day's close at 283.55. Meanwhile, gold prices in Pakistan declined on Thursday, mirroring a soft trend in the international market where bullion remained largely steady as escalating geopolitical tensions in the Middle East balanced the downward pressure from the US Federal Reserve's hawkish monetary outlook. Meanwhile, platinum prices slipped slightly after touching their highest level since September 2014. In the local market, the price of gold fell Rs460 per tola, settling at Rs358,595, according to data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). Similarly, the price of 10 grams of gold decreased Rs394 to Rs307,437. Internationally, gold prices were little changed as heightened geopolitical tensions offset pressure from the Fed's hawkish stance. Spot gold was down 0.1% at $3,365.79 an ounce at 1340 GMT. US gold futures fell 0.7% to $3,382.80. Interactive Commodities Director Adnan Agar noted that gold prices were in a holding pattern as markets awaited clarity on the Israel-Iran conflict. "Gold is on pause because the geopolitical situation, especially regarding Israel and Iran, remains unresolved. By the weekend, we'll know whether the US will intervene or not," he said. Agar added that platinum had recently gained attention, hitting a 10-year high after lagging behind other precious metals for an extended period. "For a long time, platinum and silver were undervalued compared to gold, which recently reached record highs. Now, as gold pauses, investors are turning to platinum and silver, driving their prices up. Both metals reached multi-year highs just a few days ago," he elaborated.
Express Tribune
17-06-2025
- Business
- Express Tribune
Real Effective Exchange Rate improves to 97.81 in May
Listen to article Pakistan's Real Effective Exchange Rate (REER) index, a crucial indicator of trade competitiveness, improved to 97.81 in May 2025, according to a report released by the State Bank of Pakistan (SBP). This represents a 1.5% drop from the previous month's figure of 99.30, according to AKD Securities. The decrease in REER, which measures the value of a currency against the weighted average of several trade partner currencies, suggests that Pakistan's exports have become more competitive in the international market. An index value below 100 typically indicates the currency is undervalued, making the country's goods and services cheaper for foreign buyers. "Both PKR depreciation and lower inflation vs trading partners have contributed to the decline in REER index in recent months," said Maaz Azam, Head of Research at Optimus Capital. The Pakistani rupee weakened 0.37% against the US dollar, ending the month of May at an exchange rate of 282.02. This development is likely to be viewed favourably by exporters as a more competitive exchange rate can help boost sales and support the country's external account. On Tuesday, the rupee weakened against the US dollar by 0.08% in the inter-bank market. By the end of trading, the local currency stood at 283.41, down 24 paisa compared to the previous close at 283.17. Globally, the US dollar edged up, while most other currencies traded within narrow ranges as investors stayed cautious amid persistent Middle East tensions and upcoming central bank policy announcements. Meanwhile, gold prices in Pakistan declined on Tuesday, mirroring a drop in the global market. In the domestic market, the price of gold per tola fell Rs1,000 to settle at Rs361,300. Likewise, the price of 10 grams of gold dipped Rs857 to Rs309,756, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). Internationally, gold prices also moved lower, falling $16 to $3,398 per ounce (including a $20 premium), as reported by the APSGJA. Interactive Commodities Director Adnan Agar stated that gold prices remained largely stable, with future movements depending on potential involvement of the US in the Iran-Israel conflict. He noted that if the US decided to intervene, gold prices could see a sharp increase; otherwise, the market was expected to remain steady.
