- Pakistan Rupee (PKR) trades under pressure
- FDI falls by 30%
- US Dollar (USD) edges lower versus major peers post Yellen
- Biden’s inauguration later today
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Wednesday paring losses from the previous session. The pair settled on Tuesday -0.1% at 160.10. At 09:45 UTC, USD/PKR trades +0.3% at 160.65.
According to the State Bank of Pakistan, foreign direct investment (FDI) dropped by 30% in the first half of the current fiscal year, reflecting the impact that the covid pandemic was still having on the economy.
According to the central bank $952 million was received in foreign investment in the July – December period. This was down from $1.357 billion the same period the previous year.
In fiscal year 2020, Pakistan received $2.561 billion in FDI compared to $1.362 billion the previous year. However, the pandemic has dramatically hit global economies reducing Pakistan’s ability to attract large amounts of foreign investment.
The US Dollar trended higher versus the Pakistan Rupee, however it trended lower versus its major peers. The US Dollar Index (DXY) which measures the greenback against major peers trades -0.1% at the time of writing amid an upbeat mood in the broader financial markets.
On Tuesday, the US Treasury Secretary Janet Yellen appeared before the Senate’s Finance Committee and urged the Federal Government to “Act big”, supporting Joe Biden’s huge $1.9 trillion covid stimulus package.
US – President elect Joe Biden will be inaugurated today. This is not expected to be a market moving event. However, it marks the start of a new era of Democrats control.
Joe Biden’s first actions in office will be closely eyed. Optimism is rising that the additional covid stimulus package will quickly be approved bringing extra support to the US economy.
Joe Biden is also expected to speed up the distribution of covid vaccines as the number of US covid deaths surpassed 400,000 and the number of total infections in the US topped 24 million.