Pakistan: Reserves climb to $21.7b
Wire desk byline Sourced from Xinhua, Dawn, Arab News, Anadolu and Minute Mirror. Translated and abridged by the GSRRA Desk.
Gold crashes from Rs24,300 to Rs499,462 per tola amid global sell-off
The central bank said in its latest weekly update on Thursday that the country’s foreign exchange reserves, held by the SBP, decreased $66 million to $8.15 billion in the week ended January 5, 2024 due to debt repayments. photo: file
Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) rose by $13 million every week to stand at $16.35 billion.
The country’s total liquid foreign reserves increased to $21.70 billion, of which $16.35 billion was held by the central bank, while commercial banks had net foreign reserves of $5.35 billion.
Furthermore, the Pakistani rupee posted a marginal gain against the US dollar, settling at 279.25 in the inter-bank market on Thursday, up by Rs0.01 from Wednesday’s close of 279.26.
Gold prices in Pakistan plunged, mirroring a steep decline in the international market, where bullion extended losses for a seventh consecutive session amid rising geopolitical tensions and inflation concerns.
In the domestic market, the price of gold per tola dropped by Rs24,300 to settle at Rs499,462, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10 grams of gold fell by Rs20,833 to Rs428,208.
The sharp decline comes a day after gold prices remained unchanged at Rs523,762 per tola on Wednesday, indicating heightened volatility in the local bullion market. Silver prices also followed the downward trend on Thursday, decreasing by Rs760 to Rs7,734 per tola.
In the global market, spot gold fell nearly 4% to $4,629.29 per ounce by late Thursday morning trading, marking its lowest level since early February, according to Reuters. Meanwhile, US gold futures for April delivery dropped 5.4% to $4,632.40 per ounce.
Analysts attributed the sustained decline to a shift in investor sentiment as escalating tensions in the Middle East pushed oil prices above $110 per barrel, intensifying inflationary pressures. The surge in energy prices has reinforced expectations that major central banks, including the US Federal Reserve, may keep rates higher for longer to contain inflation.
“Gold is now a very widely held position for institutional investors, largely driven by the debasement trade over the past year. However, the foundations of that trade are now weakening,” said Daniel Ghali, Commodity Strategist at TD Securities.
Market participants are also closely monitoring geopolitical developments, including potential US military reinforcements in the Middle East, which could further influence commodity prices and monetary policy expectations.
The combination of elevated oil prices, persistent inflationary risks, and a hawkish central bank outlook has reduced the appeal of non-yielding assets like gold, leading to the recent sell-off in both global and domestic markets.
Reference Link:- https://tribune.com.pk/story/2598530/reserves-climb-to-217b
Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…
