ISLAMABAD: Gold prices in the local market increased for the second straight day by Rs1,000 per tola on Tuesday amid rupee’s depreciation against the US dollar and an overnight uptick in international bullion prices.
According to the Karachi Sarafa Association, the price of one tola of 24-karat gold increased to Rs212,800 from Rs211,800. Similarly, the gold price for 10 grams of 24-karat gold increased to Rs182,442 from Rs181,584, showing an increase of Rs858.
The Pakistani rupee maintained its losing streak against the US dollar in the inter-bank market for the 16th consecutive session and depreciated by 32 by Rs0.12 during the current fiscal year 2023-24, while it has depreciated by Rs56.19 in the current year. The rupee gained Rs6.26 (+2.23 percent) against the greenback in the month of October. The currency surged more than 6 percent in September to become the top performer in the world.
Similarly, the Pakistani rupee depreciated by Re1 against the greenback in the open market. The rupee was quoted in the range of 287-290 a dollar as compared to 286-289 in the previous session. The rupee has recovered by Rs42 against the dollar in the last 49 sessions in the open market. During the last week, the PKR lost Rs3 for both buying and selling against the USD.
The gap between rates in the inter-bank and open markets is required to be less than 1.25 percent under one of the structural benchmarks set by the International Monetary Fund (IMF). The market is watching the ongoing discussions between the government and the IMF. Pakistan and the IMF initiated technical level discussions on the first review on November 03 and policy level talks are likely to be held from 13th November onwards.
Last week, the caretaker Finance Minister Dr Shamshad Akhtar told the media that she is optimistic about the success of talks with the IMF on the first review while responding to questions outside the Finance Ministry. She added that talks are progressing positively as all the ministries and divisions have implemented the agreed targets and their performance is satisfactory.
Meanwhile, the country’s trade deficit for the month of October widened by over 38 percent on a month-on-month basis to $2.1 billion compared to a deficit of $1.52 billion in the previous month. According to Goldman Sachs, the performance of the local currency has concluded in the backdrop of financing risks and the upcoming elections. “The recent appreciation of the Pakistani rupee will likely be short-lived, given soaring interest costs and only short-term arrangements with the IMF and bilateral financing to support the external balance,” Goldman Sachs said in a report.
In a related development, Pakistan’s foreign exchange reserves increased by 0.05 percent on a week-on-week basis, reaching $7.51 billion, according to the SBP data. As of the week ending on November 3, 2023, the central bank’s foreign currency reserves reached $7,511.5 million, marking a $4 million rise compared to the previous week’s total of $7,507.8 million. The country’s total liquid foreign currency reserves, which include reserves held by commercial banks, reached $12,614.2 million, with commercial banks holding $5,102.7 million. – TLTP