Islamabad: As Pakistan struggles to secure external financing to pull the country out of the economic crisis, foreign exchange reserves held by the State Bank of Pakistan (SBP) reversed their course, snapping their six-week winning streak, media reports said.
In its weekly bulletin, the SBP said that its foreign exchange reserves have decreased by $354 million to $4.2 billion as of the week ended March 24, which will provide an import cover of less than a month, Geo News reported.
The net forex reserves held by commercial banks stood at $5.6 billion, $1.3 billion more than the SBP, bringing the total liquid foreign exchange reserves of the country to $9.8 billion, the statement said.
Pakistan’s $350 billion economy continues to dwindle amid financial woes as the authorities struggle to strike a staff-level agreement with the International Monetary Fund (IMF).
The Washington-based lender has been in talks with the Pakistani authorities since end-January to resume the $1.1 billion loan tranche held since November last year, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.
The IMF funding is critical for Pakistan to unlock other external financing avenues to avert a default on its obligations.
An IMF statement said substantial progress has been made in discussions towards policies in recent days and financial assurances are standard in IMF programmes, Geo News reported.
Mumbai: India’s foreign exchange reserves dropped USD 325 million to USD 560.942 billion as of February 24, according to the Reserve Bank of India’s latest data. In the previous reporting week, the overall reserves had declined USD 5.68 billion to USD 561.267 billion.
Foreign exchange reserves declined by USD 5.681 billion to USD 561.267 billion in the week ending on February 17. This is third consecutive week of decline in overall forex reserves.
The reserves have been declining as the central bank deploys the reserves to defend the rupee amid pressures due to various factors, mainly global developments.
The foreign currency assets, the biggest component of the forex reserves, fell by USD 166 million to USD 495.90 billion. It had dropped USD 4.51 billion in the previous week. The value of gold reserves declined by USD 66 million to USD 41.75 billion.
Forex trading is the buying and selling of various currencies with the aim of making a profit. Since it is one of the most prevalent sorts of trading, it attracts a large number of traders from all over the world. One of the key currencies in the foreign exchange market is the Indian rupee, which is one of the currencies of developing economies and one of the principal currencies traded there. In this essay, we will go through the fundamentals of foreign currency trading, with a focus on the Indian rupee and other major currencies.
Learning about the foreign exchange market
The forex trading market is the world’s most significant and largest financial market. Traders may buy and sell currencies from all around the world on this market, which is open 24 hours a day, five days a week. The market is decentralised, which means that it does not function in a single place. Instead, the transaction is carried out digitally via a consortium of financial institutions that includes banks, brokers, and others.
Trading foreign exchange (forex) is a very active and fast-paced market that is open five days a week, 24 hours a day. This implies that traders may have access to the market at any time of day and from any location on the globe in order to trade currencies. The scale and liquidity of the foreign exchange market make it one of the most actively traded markets in the world, with a daily turnover of more than $5 trillion. Due to the fact that this market’s liquidity enables traders to join and exit positions rapidly and at advantageous prices, the market is appealing to traders who are looking for chances to engage in short-term trading. Traders nonetheless need to maintain a constant awareness of the latest economic and geopolitical news and events, particularly those that have the potential to influence currency markets.
Forex trading using the Indian rupee
The use of the Indian rupee in foreign currency dealing is becoming more popular among dealers worldwide. The Indian rupee is the country’s major currency, and it often trades on the foreign exchange market. There are many techniques to follow when trading foreign currencies using the Indian rupee.
Trading foreign exchange using the Indian rupee is possible using the currency pair USD/INR. The most prevalent and popular currency combination in India is the trade of US dollars for Indian rupees. It entails buying and selling one currency in exchange for another. Another way to trade foreign currency with the Indian rupee is to use the currency pair EUR/INR. Particularly, this covers acquiring and selling the euro in exchange for Indian rupees.
To trade foreign exchange using the Indian rupee, traders must first grasp the factors that determine the currency’s value. These components include the nation’s economic performance, government stability, interest rates, and trade balance. Traders must also keep a careful eye on global events such as geopolitical tensions, economic data releases, and changes in monetary policy since these may all have an impact on the value of the Indian rupee.
Foreign exchange trade with the major currencies
In addition to the Indian rupee, a number of other prominent currencies are traded on the foreign exchange market. These currencies include the US dollar, the euro, the Japanese yen, the British pound, the Swiss franc, the Canadian dollar, and the Australian dollar. Foreign exchange, often known as forex trading, is the act of buying one currency with another in order to make a profit.
To trade forex with other currencies, forex traders must grasp the elements that influence the pricing of other major currencies. These components include the nation’s economic performance, government stability, interest rates, and trade balance. Traders must also keep a careful eye on global events such as geopolitical tensions, economic data releases, and monetary policy changes since all of these factors have the ability to affect the value of these currencies.
Methods for trading in the foreign exchange market
Investors may use a range of trading strategies while trading foreign currency (forex). This category includes strategies such as scalping, day trading, swing trading, and position trading.
Scalping is a trading strategy that tries to produce a series of small profits from a high number of transactions made throughout the day. This strategy requires outstanding analytical ability, lightning-fast reflexes, and quick decision-making.
The activity of buying and selling a currency pair on the same trading day is known as day trading. Traders must have a high degree of self-discipline and attention to be effective with this strategy. This is because they will need to make quick decisions in order to profit from short-term price swings.
Swing trading is a trading strategy that involves holding positions for a prolonged length of time, which may range from several days to a few weeks. Since they must wait for market changes before taking action, traders must be patient and disciplined if they are to succeed with this strategy.
Position trading is a trading approach that requires holding positions for a long period of time, which might be months or even years. To be successful with this strategy, traders must have a long-term perspective and a thorough understanding of the fundamental dynamics that drive currency values.
The procedure for choosing a forex broker
Choosing the finest forex broker to deal with is critical for successful forex trading. A reputable foreign exchange broker will be licensed and regulated by a reputable financial body. They will also offer fair spreads and costs, an easy-to-use trading interface, and excellent customer support.
Before making a selection, traders should consider the broker’s track record and reputation in the industry. Visitors may check ratings and reviews on the website, as well as ask for recommendations from other businesses. Another critical stage in the process is comparing the features and services provided by different brokers, such as trading instruments, leverage, deposit and withdrawal methods, and educational materials.
Conclusion
Forex trading with the Indian rupee and other major currencies may be a successful and thrilling experience for traders with the right knowledge, talents, and temperament to engage in the market. Traders must have a fundamental grasp of the foreign exchange market, a robust trading strategy, a reputable broker, and an acceptable risk management plan. Traders that follow these principles continue to educate themselves and stay adaptable in the face of continuously changing market conditions may find success in foreign currency trading.
Mumbai: India’s foreign exchange reserves declined by USD 5.681 billion to USD 561.267 billion in the week ending on February 17, according to the Reserve Bank of India’s latest data.
This is their third consecutive week of decline in the overall forex reserves.
During the week that ended on February 3, the reserves declined by USD 8.319 billion to USD 566.948 billion.
According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, declined USD 4.515 billion to USD 496.072 billion.
Gold reserves declined by USD 1.045 billion to USD 41.817 billion.
At the start of the last year 2022, the overall forex reserves were at about USD 633 billion. Much of the decline can be attributed to RBI’s recent intervention and a rise in the cost of imported goods.
In October 2021, the country’s foreign exchange reserves reportedly touched an all-time high of about USD 645 billion.
The forex reserves had been intermittently falling for months now largely because of the RBI’s intervention in the market to defend the depreciating rupee against a surging US dollar.
Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band. (ANI)
New Delhi: India’s foreign exchange reserves fell by $8.3 billion to $566.95 billion in the week ended February 10 its biggest weekly fall in 11 months.
According to data released by RBI on Friday, the reserves are at their lowest level since January 6, 2023.
The fall for the second straight week was mainly due to a decline in foreign currency assets, which dropped $7.1 billion to $500.59 billion.
In the week ended February 10, the rupee lost 0.8 percent to close at 82.51 per dollar as US jobs data sparked worries about the Federal Reserve raising interest rates for longer than was earlier anticipated.
Mumbai: The Reserve Bank on Friday updated its ‘Alert List’ for the public on unauthorised forex trading platforms to include names of entities/platforms/ websites which appear to be promoting such entities.
In September last year, the central bank came out with an ‘Alert List’ containing the names of 34 entities.
The list now has 48 entries.
“The Alert List has been updated and includes names of entities/platforms/ websites which appear to be promoting unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services,” the RBI said, and added the Alert List is not exhaustive.
It further said that an entity not appearing in the Alert List should not assume that it is authorised by the RBI to deal in foreign exchange or can operate electronic trading platforms for forex transactions.
The authorisation status of any person/Electronic Trading Platform (ETP) can be ascertained from the list of authorised persons and authorised ETPs available in the RBI’s website.
“Residents are cautioned against entities/platforms/websites which appear to be promoting such unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services (e.g. on social media including video streaming platforms) by providing for demo trading’ in simulated environment’ and such other indirect means for facilitating and doing forex trading through unauthorised entities,” it said.
The RBI also reiterated that residents using any means to remit/deposit funds, directly or indirectly, in INR or in any other currency, for undertaking forex transactions for purposes other than those permitted under the FEMA or on ETPs not authorised by the RBI shall render themselves liable for penal action under the provisions of FEMA.
Islamabad: The foreign exchange reserves held by the State Bank of Pakistan (SBP) have plunged to precarious levels as the cash-strapped nation desperately seeks to revive the stalled bailout programme of the International Monetary Fund (IMF), local media reported.
Due to foreign debt payments, the central bank said its reserves fell $592 million to $3,086.2 million during the week ended January 27, the lowest since February 2014, and are barely enough to provide import cover for 18.5 days, Geo News reported.
The reserves held by the commercial banks stand at $5,655.5 million, $2.6 billion higher than those of SBP, taking the total reserves of the country to $8,741.7 million, the central bank’s statement mentioned.
Despite the falling reserves, the federal government is ensuring it meets international debt obligations to avoid default a long-standing threat that has now forced the Shehbaz Sharif-led government to meet the conditions of the IMF.
Amid the liquidity crunch and the government’s removal of the cap on the dollar, which was a pre-condition of the IMF, the Pakistani rupee plunged to a historic low of Rs 271.35 against the US dollar in the interbank market, Geo News reported.
With the reserves hitting new lows every week and the government trying to keep itself afloat by meeting IMF demands, the prices of commodities have also witnessed a spike.
Consumer prices rose 27.6 per cent compared to 13 per cent in the same month of last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. This is the highest year-on-year inflation after May 1975 when the median rate clocked in at 27.77 per cent, Geo News reported.
Due to the ongoing situation, the central bank has also restricted the issuance of letters of credit (LCs), leading to the complete or partial shutdown of business from textile to automobile. This is causing a disruption in the supply chain, which will ultimately lead to an increase in the rates of commodities.
SBP Governor Jamil Ahmed had said last month that the country owed $33 billion in loans and other foreign payments before the end of the fiscal year in June.
Islamabad: The State Bank of Pakistan (SBP) said its foreign exchange reserves had decreased by $923 million last week.
During the week ending on January 20, the total foreign exchange reserves of the Pakistani central bank fell to around $3.67 billion, the central bank said in a statement on Thursday night.
The decrease was “due to external debt repayments”, Xinhua news agency quoted the statement as saying.
Net foreign reserves held by commercial banks came at $5.77 billion, it said.
Total liquid foreign reserves held by the South Asian country stood at about $9.45 billion, according to the SBP.
