KARACHI – The Pakistani rupee in the outgoing week appreciated against theU.S. dollar with 10 paisa in the interbank and closed at Rs155.27 on Friday.
Likewise, in the open market, it was being traded at Rs155.40 against thegreenback with slight fluctuation in the whole week.
The stock market demonstrated bullish trend during the whole trading weeklifting the benchmark KSE 100-share Index by 341 points to 37,925.79 pointson the last trading day (Friday).
On Friday at close, the index recorded an increase of 824.48 points, or2.22%. Overall, trading volumes increased to 243 million shares comparedwith Thursday’s tally of 232.6 million. The value of shares traded duringthe day was Rs8.1 billion.
With the continuous positive momentum throughout the week, the bulls rulethe KSE-100 and cumulatively the index went up and by the close of market,it managed to inch closer to the 38,000-point mark, according to theweek-long PSX trading data.
Over the course of the week, foreign investors bought shares worth USD 8.4million, which in turn contributed to the total volume of shares amountingto Rs33 billion.
Earlier during the week, State Bank of Pakistan Governor Reza Baqir hadhinted at maintaining the status quo in the monetary policy, which providedmuch-needed clarity and helped the bourse trade in the green zone.
The rally almost erased the hefty losses borne on Thursday. In the monetarypolicy announcement, the State Bank of Pakistan (SBP) kept the interestrate unchanged at 13.25%.
Foreign investment in government backed treasury bills was recorded atalmost USD 800 million since the beginning of FY20, attributable to waningconcerns on the economic front has effectively supported the slight growthin FX reserves of the SBP and consequentially, kept the exchange rateparity stable.
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The state bank said market sentiment has begun to gradually improve on theback of sustained improvements in the current account and continued fiscalprudence.
It said that the current account balance recorded a surplus in October 2019after a gap of four years, a clear indication of receding pressures on thecountry’s external accounts together with the end of deficit monetisationhas qualitatively improved the inflation outlook.
It outlined that recent economic data suggest that economic activity isstrengthening in export oriented and import competing sectors while inwardoriented sectors continue to experience a slowdown in activity.
Specifically, large-scale manufacturing (LSM) shows gains in electronics,engineering goods and fertilizer sectors and decline in auto, food, andconstruction allied industries of steel and cement.
The latest production estimates of major kharif crops suggest thatagriculture sector is likely to grow in line with projections althoughcotton production is likely to remain below target.
The external sector continued to show steady improvement, reflecting thebenefits of recent policy adjustments and other factors. In the first fourmonths of the current fiscal year, the current account deficit contractedby 73.5 percent to 1.5 billion dollars.
This improvement reflected a notable reduction in imports, a modest growthin exports and steady workers’ remittances.
