- Pakistan Rupee (PKR) remains under pressure as service sector suffers from covid-19 pandemic, particularly hotel sector
- World Bank warns the pandemic could cause $3.64 billion GDP hit to Pakistan
- The US Dollar (USD) is trading lower versus its major peers amid a broad risk on mood in the financial markets.
- US China tensions in focus after President Trump ends Hong Kong’s special status
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is trading approximately flat for the second straight day as the pair finds support at 167.20.
According to the Federation of Pakistan Chambers of Commerce and Industry Advisory Committee, the coronavirus pandemic has badly affected the service sector. The vice President of the committee said that entire the business community particularly hotels had been badly affected.
Revenues at hotels have been strangled as corporate expenses are slashed, off-site sales meetings are not happening and travel bans means no tourism or flight crew staying at hotels. This has all caused a large dent in the industry.
The update comes after a new World Bank policy brief on the tourism sector in South East Asia estimated the potential loss to Pakistan’s GDP due to the covid-19 pandemic would be $3.64 billion. The report also says that 880,000 jobs in the Pakistan tourist sector have been put at risk by the coronavirus crisis.
Risk sentiment has received a boost from vaccine news. US biotech firm Moderna Inc reported in a peer reviewed journal that its vaccine candidate produced a robust immune response in all of its 45 participants in early stage human trials. Importantly there are no safety issues which means that the vaccine candidate can progress to Phase 3 trials which will begin later this month.
A vaccine is would enable to global economy to rebound quickly back to pre-covid levels of growth. Without a vaccine consumers are expected to remain wary, potentially preventing the global economy from returning to pre-coronavirus levels of growth, or at least delaying it for a very long time.
Whilst vaccine news dragged on the safe haven US Dollar, rising tensions between US and China are keeping risk sentiment in check. President Trump announced the end of Hong Kong’s special status in retaliation for China’s national security law.