KARACHI: The Pakistani rupee is in for further bashing and is likely to depreciate to Rs94 to the dollar by the end of the fourth quarter of 2012, according to a report by Sayem Ali, economist at Standard Chartered Bank Pakistan Limited.
“We recently revised our dollar-rupee forecasts higher. The new forecasts reflect a strong US dollar into year-end on the back of persistent global uncertainty, as well as the poor outlook for Pakistan’s balance of payments,” the report said.
The weakening of the local currency is expected to continue in the coming months for a number of reasons. Ali said that a key reason for the rupee to strengthen in the fourth quarter of 2010 and first quarter of 2011 was the unexpected improvement in the current account. “However, this is unlikely to persist,” he said.
While remittances may remain strong, a wider trade deficit and higher interest payments are expected to push the current account back into deficit in financial year 2012, he added. At the same time, the financial account is likely to stay on a weak footing in the absence of substantial official inflows, including the halt to the International Monetary Fund’s (IMF) remaining loan tranches.
The slowdown in official inflows, coupled with already weak foreign investment, narrowed the financial account surplus to $2.6 billion in FY11 from $7 billion in FY10. “We expect it to shrink further to $670 million in FY12 due to the bleak outlook for official inflows,” Ali said.
Published in The Express Tribune, October 25th, 2011.
H?� i 0V (yT mpanied the president.
Asim Hussain confirmed to The Express Tribune that Iran had made the offer for export of 10,000MW of electricity.
Iran exported 3,940 gigawatt hours of electricity to its neighbours in the first half of the Iranian calendar year, according to Iranian broadcaster IRIB.
Iran’s electricity network is integrated into power grids of seven neighbouring countries including Afghanistan, Pakistan, Iraq, Turkey, Armenia, Azerbaijan and Turkmenistan.
Feasibility study on 1,000MW project completed
Pakistan has already started work on another project costing $500 million, which will import 1,000MW from Iran.
An official of the Ministry of Water and Power said that the feasibility study on import of 1,000MW from Iran through Zahidan to Quetta had been completed. Iran has already started laying a transmission line at Pak-Iran border.
To expedite the process, Pakistan has offered the company laying the transmission line on the other side of the border to build it on this side as well to avoid delay caused by the bidding process, the official added.
Pakistan is currently importing 35MW of power from Iran to meet requirements of Gwadar while work on increasing it by 100MW is in process. The two sides signed an agreement on this project in 2007 which is expected to become operational next year.
Pakistan also has another project in the pipeline to import 1,000MW of electricity from Tajikistan. Feasibility report has been finalised on this project, while work is expected to be completed by 2016.
Moreover, India has also offered Pakistan to export electricity and a working group has been formed to undertake the assignment following commerce secretary-level talks held between the two countries in April.
Currently, independent power producers generate most of the electricity in the country by producing 7,600MW, followed by 5,000MW by Wapda and 2,000MW by power generation companies.
Published in The Express Tribune, October 25th, 2011.
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@Ali Tanoli,:
If they continue to mis-manage the economy, yes.
I fear they will try and peg it and a differential will open up with the :hundi: rate and our workers' remittances will be diverted there. That will really sink us fast.
Next time we will go to pakistan Rupee will be 100 to 1 $.
These are two unconnected reports printed together.