ISLAMABAD: Gold prices in the local market rose by Rs 1,000 per tola for the second consecutive day on Tuesday, driven by the depreciation of Rupee against the US dollar and the overnight rise in international bullion prices.
According to Karachi Sarafa Association, the price of one tola of 24 carat gold has increased from Rs 211,800 to Rs 212,800. Similarly, the price of 10 grams of 24 carat gold increased by 858 rupees from 181,584 rupees to 182,442 rupees.
Pakistani rupee continued its losing streak against the US dollar in the interbank market for the 16th consecutive session, depreciating 32 rupees by 0.12 rupees in the current fiscal year 2023-24 and 56.19 rupees in the current period. year. The rupee appreciated by Rs 6.26 (+2.23 percent) against the US dollar in October. The currency gained more than 6 percent in September, making it the world’s best-performing currency.
Similarly, Pakistani rupee depreciated by Re1 against the US dollar in the open market. The rupee was priced in the range of 287-290 as compared to 286-289 per dollar in the previous session. The rupee has recovered as much as 42 rupees against the dollar in the last 49 sessions in the open market. Last week, PKR lost Rs 3 against USD in both buying and selling.
According to the structural criteria set by the International Monetary Fund (IMF), the difference between interbank and open market interest rates must be less than 1.25 percent. The market is monitoring the ongoing talks between the government and the IMF. Pakistan and the IMF started technical-level talks on the first review on November 3, and policy-level talks are likely to be held from November 13.
Last week, Minister of Finance Dr. While answering questions outside the Ministry of Finance, Shamshad Akhtar told the media that he was optimistic about the success of the talks with the IMF on initial review. He added that the talks were progressing positively as all ministries and departments implemented the agreed targets and their performance was satisfactory.
Meanwhile, the country’s trade deficit in October increased by over 38 percent on a monthly basis to $2.1 billion, compared to a deficit of $1.52 billion in the previous month. According to Goldman Sachs, the local currency’s outperformance has stalled amidst financing risks and upcoming elections. “Given rising interest costs and only short-term arrangements with the IMF and bilateral financing to support external balance, the recent appreciation of the Pakistani rupee is likely to be short-lived,” Goldman Sachs said in a report.
In a related development, Pakistan’s foreign exchange reserves increased by 0.05 percent on a weekly basis to reach $7.51 billion, according to SBP data. As of the week ending November 3, 2023, the central bank’s foreign exchange reserves reached $7,511.5 million, an increase of $4 million compared to the previous week’s total of $7,507.8 million. The country’s total liquid foreign exchange reserves, including the reserves held by commercial banks, reached 12,614.2 million dollars, while commercial banks have 5,102.7 million dollars. – TLTP
news source (thefinancialdaily.com)