Money Market, Forex and General News 29-07-09
Thursday, July 30, 2009
MONEY MARKET
State Bank conducted auction of Treasury Bills today in which bids for three and six months were rejected while cut off rate for one year bill came at 11.8769 percent. Market went aggressively to buy one year bill with participation of over Rs 99 billion out of aggregate participation of Rs 116.90 billion but Central Bank accepted only Rs49.350 billion.
FOREX
Pakistani Rupee remains under pressure vs. the greenback amidst heavy buying for oil import payment. Dollar has crossed PkR 83 psychological mark as the central bank had earlier asked the oil companies to buy currency from the interbank market discontinuing the previous practice of central bank arranging the currency for oil
imports. In FY09, oil imports totalled USD 9.5 bn (28% of country’s imports) making up the single largest category of imports. However, any delay from IMF in the release of 3rd tranche of the loan can violate the relationship as proposed by relative purchasing power parity (RPPP).
GENERAL NEWS
Pakistan that is under financial assistance through loan agreement with IMF has informed the lending authorities that the country cannot withdraw subsidies all of a sudden thus the government would provide subsidy of PkR 55bn to people friendly sectors that include power sector , fertilizer sector etc. The government feels that it is not practical to eliminate subsidy all of a sudden as it would seriously affect the workability of the sector. Feed-stock gas, a key raw material for urea production, is heavily subsidized that ensures urea’s affordability to framers thus keeping price of wheat and other essential commodities at affordable level.
State Bank conducted auction of Treasury Bills today in which bids for three and six months were rejected while cut off rate for one year bill came at 11.8769 percent. Market went aggressively to buy one year bill with participation of over Rs 99 billion out of aggregate participation of Rs 116.90 billion but Central Bank accepted only Rs49.350 billion.
FOREX
Pakistani Rupee remains under pressure vs. the greenback amidst heavy buying for oil import payment. Dollar has crossed PkR 83 psychological mark as the central bank had earlier asked the oil companies to buy currency from the interbank market discontinuing the previous practice of central bank arranging the currency for oil
imports. In FY09, oil imports totalled USD 9.5 bn (28% of country’s imports) making up the single largest category of imports. However, any delay from IMF in the release of 3rd tranche of the loan can violate the relationship as proposed by relative purchasing power parity (RPPP).
GENERAL NEWS
Pakistan that is under financial assistance through loan agreement with IMF has informed the lending authorities that the country cannot withdraw subsidies all of a sudden thus the government would provide subsidy of PkR 55bn to people friendly sectors that include power sector , fertilizer sector etc. The government feels that it is not practical to eliminate subsidy all of a sudden as it would seriously affect the workability of the sector. Feed-stock gas, a key raw material for urea production, is heavily subsidized that ensures urea’s affordability to framers thus keeping price of wheat and other essential commodities at affordable level.
Labels: Economy and Business, Pakistan Economy
posted @ 2:59 PM,
1 Comments:
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