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Category: Money & Banking

Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.

  • Rupee recovers to dollar ahead Eid holidays

    Rupee recovers to dollar ahead Eid holidays

    KARACHI: The Pakistan Rupee (PKR) recovered eight paisas against the dollar on Thursday ahead of long holidays for Eid ul Adha.

    The exchange rate recorded a gain of eight paisas in rupee value to end at Rs207.91 to the dollar from previous day’s closing of Rs207.99 in the interbank foreign exchange market.

    READ MORE: Dollar ends near Rs208 in interbank; Rupee fall continues

    The government has announced holidays from July 08 to July 12, 2022 on the account of Eid ul Adha.

    Currency experts said that the foreign exchange market was expecting a monetary tightening in today’s (July 7) monetary policy meeting. They said that the market was anticipating another 100 basis points hike which would ease pressure on dollar demand.

    The rupee recorded an all-time low Rs211.93 to the dollar on June 22, 2022.

    READ MORE: Rupee sharply falls Rs206.94 to dollar in interbank

    The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar. The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

    During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

    The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

    READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

    The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.

    The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.

    READ MORE: Dollar gains 25 paisas to PKR on forex reserves decline

    In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.

  • SBP directs banks to open branches on July 8, 2022

    SBP directs banks to open branches on July 8, 2022

    KARACHI: State Bank of Pakistan (SBP) on Thursday directed banks to open their branches on July 08, 2022 – the first holiday for Eid-ul-Adha to facilitate people.

    The federal government has announced five days of holidays on the occasion of Eid ul Adha. Subsequently, the SBP also announced holidays from July 8 to July 12, 2022 for banks.

    READ MORE: Bank holidays announced for Eid ul Adha 2022

    However, the central bank said in order to ensure the availability of banking services to trade and industry, in particular and public in general, during the extended holidays on the occasion of Eid-ul-Adha, it has been decided that banks / MFBs shall arrange to open selected branches, only on Friday, July 8, 2022 from 9:00 a.m. to 4:00 p.m., situated in close proximity of cattle markets, big cities, business centers, commercial markets & hubs, ports etc. throughout the country.

    READ MORE: SBP enables banks to get regulatory approval digitally

    It may, however, be noted that RTGS System and Clearing through NIFT will not be available on the afore-mentioned date. Accordingly, all clearing transactions including foreign exchange conversion transactions will be settled on the next working day i.e. Wednesday, July 13, 2022.

    Banks / MFBs should ensure the deployment of minimal number of staff necessary to carry out smooth working at such branches on the above date, the SBP added.

    READ MORE: SBP makes permission mandatory for motor car import

  • SBP enables banks to get regulatory approval digitally

    SBP enables banks to get regulatory approval digitally

    KARACHI: The State Bank of Pakistan (SBP) has launched Regulatory Approval System (RAS) under which banks have been enabled to get approval digitally.

    (more…)
  • Dollar ends near Rs208 in interbank; Rupee fall continues

    Dollar ends near Rs208 in interbank; Rupee fall continues

    KARACHI: The US dollar ended near Rs208 as the Pakistan Rupee (PKR) continued depreciation on Wednesday in interbank foreign exchange market.

    The exchange rate recorded a decline of Rs1.05 in rupee value to end at Rs207.99 to the dollar from previous day’s closing of Rs206.94 in the interbank foreign exchange market.

    READ MORE: Rupee sharply falls Rs206.94 to dollar in interbank

    The local currency fell for the second straight day after making a recovery on the first trading day i.e. July 04, 2022.

    The rupee recorded an all-time low Rs211.93 to the dollar on June 22, 2022.

    Currency experts said that market witnessed advance demand for dollars due to long holidays ahead. The government has announced July 8 to July 12 as Eid holidays.

    READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

    The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar. The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

    During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

    READ MORE: Dollar gains 25 paisas to PKR on forex reserves decline

    The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

    The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.

    READ MORE: Dollar retreats to Rs207.23 at interbank closing

    The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.

    In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.

    READ MORE: Rupee slips to new low at Rs211.93 against dollar

  • SBP makes permission mandatory for motor car import

    SBP makes permission mandatory for motor car import

    KARACHI: The State Bank of Pakistan (SBP) on Tuesday made it mandatory for banks to take prior permission for making transactions related to import of motor cars in Completely Knocked Down (CKD).

    The SBP issued a circular to implement the decision. The central bank invited attention of banks to EPD Circular Letter No. 9 dated May 20, 2022 relating to import of goods.

    READ MORE: Pakistan car sales climb up by 50% in 11 months

    In this regard, the list of goods for which Authorized Dealers are required to seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC for initiating the import transaction, has been updated.

    Henceforth, Authorized Dealers shall be required to seek prior permission from FEOD, SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure.

    READ MORE: Pakistan massively increases taxation on motor vehicles

    All other instructions on the subject shall remain unchanged. The banks have been advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above and other applicable regulations on the subject.

    Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.

    READ MORE: Pakistan allows conditional import of CBU vehicles

    It is important to note that the government on May 19, 2022 imposed ban on luxury and non-essential items in order to discourage outflow of dollars.

    The import ban was imposed on only motor vehicles Completely Built Unit (CBU). However, the circular of the SBP has made the CKD motor cars import subject to prior approval.

    READ MORE: Honda Cars declares 40% surge in annual profit

  • Pakistan may see further 100bps hike in policy rate

    Pakistan may see further 100bps hike in policy rate

    KARACHI: Pakistan central bank is scheduled to review policy rate on July 07, 2022 and analysts believed an increase of up to 100 basis points due to surge in inflation.

    A report of K Trade Research issued on Tuesday, stated that the State Bank of Pakistan (SBP) scheduled its monetary policy meeting for July 07, 2022 to set policy rates for the next six weeks.

    READ MORE: SBP increases interest rate by 150bps to 13.75%

    “Given the recent inflationary wave, we anticipate another 75-100 basis points hike in the policy rate to 14.5-14.75 per cent,” according to the analysts.

    The SBP in its monetary policy announcements on April 7, 2022 and May 23, 2022 has already increase policy rate by 250 basis points and 150 basis points, respectively. The central bank increased the policy rate by 400 basis points from 9.75 per cent to 13.75 per cent in just last two announcements.

    READ MORE: SBP may increase key policy rate by 100bps: poll

    Inflation for June 2022 touched 13-year high levels of 21.3 per cent, driven by the reversal of petroleum and electricity subsidies. Real interest rates for the month fell to nearly -8.0 per cent from 0 per cent in May 2022.

    Moreover, core Non-Food Non-Energy (NFNE) inflation has entered double-digits (12.3 per cent in Jun 2022), indicating strong underlying demand in the economy.

    The analysts project inflation to average around 16.0 per cent in current fiscal eyar 2022/2023, given the re-implementation of taxes in the petroleum pricing structure.

    READ MORE: SBP may raise policy rate by 100bps to 13.25%

    Moreover, elevated prices of both RLNG and Coal will further push electricity prices to higher levels. Notably, electricity production cost from imported coal (20 per cent of power mix) is up nearly 4x YoY, and electricity production cost from RLNG (20 per cent of power mix) is up 2.5x YoY.

    On a forward-looking basis, we estimate real interest rates stand at -2.3 per cent, strengthening our case for another policy rate hike.

    READ MORE: Policy rate may rise as T-Bill yields increase sharply

    External imbalances remain elevated as the trade deficit for Jun 2022 stood at USD 4.8 billion, driven by elevated energy and commodity prices. Moreover, material concerns have arisen over the potential sustainability of exports, given the economic slowdown in key markets. Notably, textile players are anticipating a 15-20 per cent reduction in volumetric export off-take in 2022/2023, potentially exacerbating the external imbalances.

    READ MORE: State Bank enhances frequency of MP reviews to eight

    The analysts believe a tight monetary stance over the medium is necessary to ensure Pakistan’s economy weathers the global inflationary wave and the ensuing external and fiscal imbalances.

    The short tenor secondary market yields have crossed 15.0 per cent and the 3-month treasury-bill cut-off yields touched 15.23 per cent in the latest auction, hinting at market expectations of another hike.

  • Rupee sharply falls Rs206.94 to dollar in interbank

    Rupee sharply falls Rs206.94 to dollar in interbank

    KARACHI: The Pakistan Rupee (PKR) fell sharply by Rs2.38 to Rs206.94 against the US dollar on Tuesday owing to long holidays ahead for Eid ul Adha.

    The exchange rate witnessed a decline of Rs2.38 in rupee value to end at Rs206.94 against the dollar as compared with previous day’s closing of Rs204.56 in the interbank foreign exchange market.

    READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

    Currency experts said that higher demand was seen due to long holidays on the occasion of Eid ul Adha. The government has announced July 8 to July 12 as Eid holidays.

    The rupee during the fiscal year 2021/2022 remained under pressure and lost value sharply. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

    READ MORE: Dollar gains 25 paisas to PKR on forex reserves decline

    The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar, according to data made available to PkRevenue.com on Thursday.

    The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

    During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

    The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

    READ MORE: Dollar retreats to Rs207.23 at interbank closing

    These inflows would help the State Bank of Pakistan (SBP) to improve its foreign exchange reserves. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

    The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.

    READ MORE: Rupee slips to new low at Rs211.93 against dollar

    The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.

    In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.

  • SBP adopts Sharia standards of accounting, auditing

    SBP adopts Sharia standards of accounting, auditing

    KARACHI: State Bank of Pakistan (SBP) on Monday said it has adopted Sharia standards of accounting and auditing for Islamic banks in the country.

    In a statement, the central bank said strengthening Shariah compliance of Islamic banking industry in line with the best international practices is one of the key pillars of SBP’s 3rd Strategic Plan for Islamic Banking Industry 2021-25.

    READ MORE: Pakistan’s central bank launches digital financial literacy for farmers

    Under the plan, SBP has been adopting Shariah standards of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in a systematic and gradual manner.

    The standardization and harmonization in Shariah practices and procedures are helping in elevating the local Islamic banking industry at par with the international best practices.

    After a comprehensive process of evaluation and deliberations with the internal and external stakeholders, keeping in view our local environment, today the State Bank of Pakistan (SBP) has adopted four more AAOIFI Shariah standards on: i) Salam and Parallel Salam, ii) Istisna’a and Parallel Istisna’a, iii) Combination of Contracts and iv) Irrigation Partnership (Musaqat), with certain clarifications and amendments.

    READ MORE: Meezan Bank installs 1000th ATM

    Salam is a mode of finance frequently used in agriculture while Istisna’a   is a mode generally used by Islamic banking institutions to provide financing where manufacturing/assembling/processing is involved. Irrigation partnership (Musaqat) standard can be used in agriculture sector, especially for orchard financing while standard on combination of contract provides guidance to Islamic banking institutions when making use of multiple contracts in their various arrangements to meet the needs of the customers. It may be noted that earlier SBP has already issued detailed general guidelines on Islamic financing for agriculture sector.

    READ MORE: Standard Chartered facilitated by BenchMatrix

    With adoption of these four standards, the total number of AAOIFI Shariah standards adopted by SBP has reached twenty while work on remaining standards is underway. Besides, there are few AAOIFI standards which have already been adopted by SBP as part of its various regulations, instructions and guidelines issued from time to time.

    AAOIFI is a leading international organization primarily responsible for development and issuance of standards for the global Islamic finance industry. SBP has remained a key member of AAOIFI’s Board of Trustees.

    READ MORE: Pakistan-issued prize bonds expire on June 30, 2022

  • Bank holidays announced for Eid ul Adha 2022

    Bank holidays announced for Eid ul Adha 2022

    KARACHI: The State Bank of Pakistan (SBP) on Monday announced bank holidays on the occasion of Eid ul Adha 2022.

    In a circular issued to president and chief executives of all banks, development financial institutions and microfinance banks, the central bank said the SBP will remain closed from 8th to 12th July, 2022 (Friday to Tuesday) being public holidays on the occasion of Eid-ul-Adha.

  • Rupee starts FY23 with 29 paisas recovery to dollar

    Rupee starts FY23 with 29 paisas recovery to dollar

    KARACHI: The Pakistan Rupee (PKR) started FY23 (fiscal year 2022/2023) with a recovery of 29 paisas against the dollar on Monday.

    The exchange rate witnessed a recovery of 29 paisas in rupee value to end at Rs204.56 to the dollar from last closing of Rs204.85 on June 30, 2022 in the interbank foreign exchange market.

    READ MORE: Rupee plunges 30% to dollar in fiscal year 2021-2022

    The foreign exchange market was opened after bank holiday and weekly holidays.

    The local currency ended the fiscal year 2021/2022 with a massive decline of 30 per cent against the dollar, according to data made available to PkRevenue.com on Thursday.

    The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

    During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

    READ MORE: Dollar slips to end at Rs205.12 in interbank

    The rupee is making recovery after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

    These inflows would help the State Bank of Pakistan (SBP) to improve its foreign exchange reserves. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

    READ MORE: Rupee recovers sharply on expected IMF inflows

    The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.

    The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.

    In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.

    READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows