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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.

  • FAP demands dollar exchange without CNIC condition

    FAP demands dollar exchange without CNIC condition

    KARACHI: Forex Association of Pakistan (FAP) on Monday demanded the government of allowing US dollar exchange without the condition of Computerized National Identity Card (CNIC) in order to ensure sufficient supply of the foreign currency.

    In a statement issued by FAP President Malik Mohammad Bostan said an estimated amount of $3 billion were taken at home safes and bank lockers. “People want to exchange the foreign currency but without CNIC condition,” he added.

    READ MORE: FAP suggests incentive to undeclared $3 billion

    Bostan said prior to 2008 under Protection of Economic Reform Act, many people purchased the foreign currency and parked at foreign banks and also had taken at homes or bank lockers. “At that time there was no condition CNIC,” he added.

    “If this condition is relaxed then exchange companies will able to purchase huge amount of dollars and other foreign currency from public,” Bostan said.

    READ MORE: Dollar hits record high Rs194 in midday trading

    FAP President said the government should allow purchase of gold from local market. “They may sale gold in international market and surrender foreign currency in the local market.”

    There is need to channelize foreign currency invested in cryptocurrency, he said and demanded that the government should provide legal cover to bring foreign currency back home.

    READ MORE: Pakistan’s forex reserves fall to $16.37 billion

    He suggested that banks should stop forward dollar selling and should be allowed to sale dollar equivalent to purchase.

    Bostan said the State Bank of Pakistan (SBP) should imposed 100 per cent cash margin on all imports except for necessary items.

    READ MORE: Pakistan receives record monthly high $3 billion as remittances

  • Dollar hits record high Rs194 in midday trading

    Dollar hits record high Rs194 in midday trading

    KARACHI: The US dollar hit a record high of 194 against the Pakistan Rupee (PKR) during midday trading at interbank foreign exchange market on Monday.

    The exchange rate witnessed a loss of Rs1.47 in the local currency value against the greenback. The dollar is being traded at Rs194.

    READ MORE: Rupee falls for 8th straight day; dollar hits Rs192.53

    Currency experts said that massive fall in foreign exchange reserves and high import payments were the major reasons behind rupee fall.

    Pakistan’s foreign exchange reserves fell by $177 million to $16.376 billion by week ended May 6, 2022. The foreign exchange reserves of the country were $16.553 billion by week ended April 30, 2022.

    READ MORE: Rupee fall continues; dollar hits new high at Rs191.77

    The country’s foreign exchange reserves hit record high at $27.228 billion by week ended August 27, 2021. Since then the foreign exchange reserves have depleted by $10.852 billion.

    The official reserves of the State Bank witnessed a decline of $190 million to $10.309 billion by week ended May 6, 2022 as compared with $10.499 billion a week ago.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The SBP reserves reached to record high at $20.145 billion by August 27, 2021. The official reserves also fell by $9.836 billion after reaching record high. The official reserves of the SBP have been reduced to provide import payment cover for only 1.56 months.

    The import bill of the country surged by 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year as compared with $44.73 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s oil bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

  • FBR tightens monitoring to prevent currency smuggling

    FBR tightens monitoring to prevent currency smuggling

    ISLAMABAD: The Federal Board of Revenue (FBR) has tightened monitoring to prevent currency smuggling in the wake of free-fall in rupee value against the foreign currencies.

    A statement issued on Sunday stated that FBR Chairman Asim Ahmad had instructed customs field formations for stepping up vigilance to ensure monitoring of passengers to stop currency smuggling.

    “Building further on its policy of zero tolerance against currency smuggling, Chairman FBR has instructed Customs field formations for stepping up vigilance at airports and land border stations. Concerned Collectorates to ensure monitoring of all inbound and outbound passengers,” according to a Tweet.

    The US dollar has continued momentum of appreciation against the Pakistan Rupee (PKR) in the interbank foreign exchange market.

    READ MORE: Rupee falls for 8th straight day; dollar hits Rs192.53

    The rupee fell for the eight straight days to the record low of Rs192.53 to the dollar on May 13, 2022. The fall in rupee value may be attributed to fall in foreign exchange reserves and high payments for imports. However, some believed the unrecorded outflow of foreign currency also depressed the foreign exchange market.

    Previously, the FBR on September 24, 2021 issued a clarification rebutting the reports of currency smuggling from Pakistan to Afghanistan.

    READ MORE: FBR rebuts currency smuggling to Afghanistan

    In the statement, the FBR categorically rebutted the unfounded, malicious intent and misleading in content propaganda being advanced by some irresponsible elements that there was a huge flight of dollars from Pakistan.

    It is further clarified that previously the bilateral trade between Pakistan and Afghanistan was carried out in US Dollars but now the same is being conducted in Pak Rupees (PKR).

    Furthermore, FBR has taken very stringent enforcement measures at the Airports to eliminate the possibility of any such an unethical practice.

    Pakistan Customs has made it mandatory for all passengers flying out of the country to undergo thorough personal scrutiny and 100 per cent declaration of currency through an automated process in order to ward off this nefarious illegal activity. This leaves the little possibility of the subject undesirable practice.

    READ MORE: Multan customs auctions smuggled diesel oil on May 18, 2022

    It is most likely that Chairman FBR and Member (Customs Operations) will visit the Pak-Afghan border to oversee the functioning of the above mechanism on the ground.

    It is further reiterated that this transparent and efficient mechanism being adopted at all the airports across Pakistan is facilitating the smooth and easy movement of outbound passengers, thus significantly reducing their time and cost.

  • SBP governor assumes charge of Asian Clearing Union

    SBP governor assumes charge of Asian Clearing Union

    KARACHI: Dr. Murtaza Syed, Governor (Acting) State Bank of Pakistan (SBP) has assumed the charge of Chairman of the Board of Directors of the Asian Clearing Union (ACU) in the 50th meeting of the ACU Board held in Islamabad on May 13, 2022 in both physical and virtual modes.

    Established in 1974 with permanent headquarters in Iran, the Asian Clearing Union (ACU) is a payment arrangement system whereby member countries settle payments for intra-regional transactions among their central banks on a net multilateral basis. Currently, the Central Banks of Bangladesh, Bhutan, Iran, India, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are members of the ACU.

    READ MORE: Dr. Murtaza assumes acting SBP governor charge

    The main objectives of the clearing union are to facilitate payments among member countries for eligible transactions, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among the participating countries.

    The Secretary General of ACU, Mrs. Lida Borhan Azad, presented the annual report on the operations of the union for the year 2020, which the Board approved and adopted.

    READ MORE: Court judgment: Riba is Haram in any form

    The Board reviewed progress on the ongoing projects being undertaken by the union. It reviewed a new web based messaging system and constituted a sub-committee to finalize the recommendations for its implementation within six months. The Board also considered the report on issues faced by traders under the ACU mechanism and decided to implement the recommendations in the next three months. While appreciating the report on the use of domestic currencies for settlement of trade transactions prepared by the Reserve Bank of India (RBI), the Board requested RBI to convene a virtual seminar to enable member countries to gain a fuller understanding of the proposed mechanism.

    READ MORE: SBP imposes penalty of Rs109 million on four banks

    The Governors and head of the delegations of the countries also gave a broad overview of the economic development in their respective economies and shared their experiences in addressing the challenges emerging in the post COVID-19 global landscape.

    Governor Central Bank of Myanmar, Than Nyein, Vice Governor Central Bank of Iran, Dr.Mohsen Karimi, Chief Economist Central Bank of Bangladesh Md. Habib ur Rehman, and Executive Director Nepal Rastra Bank Ramu Paudel participated in the meeting physically. Governor Dr. P. Nandalal Weerasinghe, and Deputy Governor of Central Bank of Sri Lanka, T.M.J.Y.P Fernando, Governor Maldives Monetary Authority Ali Hashim, Ms. Yangchen Tshogel Central Bank of Bhutan and Executive Director RBI Mr. Radha Shyam Ratho, attended the meeting virtually.

    READ MORE: IPS demands implementation of court judgment on Riba

    At the conclusion of the Board meeting, Mrs. Lida Borhan Azad relinquished the charge of Secretary General of the ACU after distinguished service of the Union for 15 years.

    While appreciating the services of Mrs. Lida Borhan, the Board appointed Farhad Morsali as the new Secretary General of the ACU, as recommended by the Central Bank of Iran.

    The meeting ended with all member countries emphasizing their commitment to further enhancing their trade and banking relationships. It was decided that central bank digital currencies (CBDCs) would be the special topic on which research would be conducted during Pakistan’s chairmanship of the ACU over the next twelve months.

  • FAP suggests incentive to undeclared $3 billion

    FAP suggests incentive to undeclared $3 billion

    People have an undeclared amount of $2 billion to $3 billion foreign currency in their homes and personal bank lockers. They want to exchange with Pakistani Rupee (PKR) but due to certain restrictions they are unable to bring it out. The government should provide legal shelter for declaration of concealed dollars, which will help to boost the foreign exchange reserves.

    READ MORE: Pakistan’s forex reserves fall to $16.37 billion

    Malik Muhammad Bostan, President, Forex Association of Pakistan (FAP) commented these at a conference on present economic woes, especially falling rupee and depletion of foreign exchange reserves.

    “Many people taking advantage of Economic Reform Act purchased huge amount of dollars from the local market during the period of 1993 to 2008 and deposited in the banks of foreign countries or retained the dollars at their homes or lockers,” he said.

    READ MORE: Pakistan’s forex reserves dip to $16.55 billion

    Prior to year 2008, there were many unlicensed money exchange companies were operating under Economic Reform Act. Those exchange companies were allowed to sale and purchase foreign currency without ‘Know Your Customer (KYC)’. SBP licensed exchange companies were required to conduct KYC on sale/purchase of above $10,000.

    “Now those people want to sale their dollars through KYC but without identification,” he said, adding that the under Financial Action Task Force (FATF) conditions, the banks are required to obtain identification on sale/purchase of above $15,000.

    READ MORE: SBP forex reserves shrink to 1.69 months import cover

    “If this condition is relaxed then exchange companies will able to purchase huge amount of dollars and other foreign currency from public,” Bostan said.

    FAP President said the government should allow purchase of gold from local market. “They may sale gold in international market and surrender foreign currency in the local market.”

    Pakistan forex reserves inch up to $17.045 billion

    There is need to channelize foreign currency invested in cryptocurrency, he said and demanded that the government should provide legal cover to bring foreign currency back home.

    He suggested that banks should stop forward dollar selling and should be allowed to sale dollar equivalent to purchase.

    Bostan said the State Bank of Pakistan (SBP) should imposed 100 per cent cash margin on all imports except for necessary items.

    Pakistan’s forex reserves deplete to $17.03 billion

  • Rupee falls for 8th straight day; dollar hits Rs192.53

    Rupee falls for 8th straight day; dollar hits Rs192.53

    KARACHI: The Pakistan Rupee (PKR) continued to slide against the US dollar for eighth straight day and reached to historic low at Rs192.53 on Friday.

    (more…)
  • Dollar jumps to Rs193 in midday interbank trading

    Dollar jumps to Rs193 in midday interbank trading

    KARACHI: The US dollar reached to all time high at Rs193 during midday trading at interbank foreign exchange market on Friday.

    The rupee lost Rs1.23 to the dollar and being traded at Rs193 from previous day’s closing of Rs191.77 in the interbank foreign exchange market.

    Currency experts said that falling foreign exchange reserves and high import payments had escalated dollar demand.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The rupee continued its free fall for the seventh consecutive day yesterday.

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s import bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    The depleting foreign exchange reserves are also putting pressure on the local currency.

    Pakistan total import bills recorded an increase of 49 per cent to $58.87 billion during the first nine months of the current fiscal year as compared with $39.49 billion in the corresponding period of the last fiscal year.

    READ MORE: Dollar ends Rs187.53 at interbank market close

    This resulted in huge widening in trade deficit of 70 per cent. The trade deficit of the country swelled to $35.39 billion during first nine months of the current fiscal year as compared with the deficit of $20.8 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee fall continues; dollar hits new high at Rs191.77

  • Pakistan banks register record profit in 1Q2022

    Pakistan banks register record profit in 1Q2022

    KARACHI: Pakistan banks have posted a record profit of Rs81 billion during first quarter of the calendar year 2022, analysts said at Topline Securities.

    The profitability of the listed banks surged by 28 per cent on year on year (YoY) basis and 19 per cent on Quarter on Quarter (QoQ) basis.

    READ MORE: MCB Bank finalizing Easypaisa acquisition

    Net Interest Income (NII) of the banks drove sector’s profitability growing by 21 per cent YoY to Rs220 billion due to rising asset yields. Markup interest earned on earnings assets was up 48 per cent YoY to Rs564 billion whereas markup interest expense on interest bearing deposits and liabilities were up 72 per cent YoY to Rs344 billion.

    The analysts expect NII of the sector to remain strong in the second quarter of 2022 and third quarter of 2022 as well as asset reprising is likely to complete by third quarter of 2022 given recent hike in Kibor and T-Bill/PIB rates.

    READ MORE: Pak Kuwait Investment, Enertech sign $750 million pact

    Sharp drop in provisioning expense also supported sector’s profitability as it declined by 80 per cent to Rs1.6 billion in first quarter of 2022 led by macro recovery and improved asset quality.

    With sector’s coverage ratio close to 100 per cent, risk to abrupt increase in provision charge going ahead is minimal.

    Non-interest expense of the sector was also up 19 per cent YoY with major contributions coming from Habib Bank (+27 per cent to Rs31 billion), National Bank of Pakistan (+16 per cent to Rs17 billion), and Bank Al-Habib (+25 per cent to Rs11.9 billion).

    READ MORE: National Saving Schemes facilitation portal launched

    In terms of NII growth, MEBL, Bank Alfalah (BAFL) and SCBPL posted growth of 42 per cent, 38 per cent, and 36 per cent respectively on YoY basis.

    In first quarter of 2022, Standard Chartered Bank (SCBPL) and Meezan Bank (MEBL) posted highest earnings growth of 119 per cent and 51 per cent YoY, respectively. On other hand, Soneri Bank (SNBL) and Bank of Khyber (BOK) registered YoY earnings decline of 31 per cent and 11 per cent.

    The analysts said they had taken all listed banks that have announced their results.

    READ MOER: Dr. Murtaza assumes acting SBP governor charge

  • Rupee fall continues; dollar hits new high at Rs191.77

    Rupee fall continues; dollar hits new high at Rs191.77

    KARACHI: The free-fall in Pakistan Rupee (PKR) continued on Thursday as the US dollar advanced to make a new high at Rs191.77 at close of interbank foreign exchange market.

    The exchange rate witnessed a decline of Rs1.75 in Pak Rupee (PKR) to end at Rs191.77 from previous close of Rs190.02 in the interbank foreign exchange market.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    Currency experts said that falling foreign exchange reserves and high import payments were the main reasons behind rupee fall.

    The rupee continued its free fall for the seventh consecutive day.

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s import bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    The depleting foreign exchange reserves are also putting pressure on the local currency.

    According to details released by the State Bank of Pakistan (SBP), the official reserves of the central bank fell by $328 million to $10.558 billion by the week ended April 23, 2022 as compared with $10.886 billion a week ago. The net foreign exchange reserves of the SBP also include $3 billion from Saudi Arabia, which was deposited with the central bank to support balance of payment.

    The foreign exchange reserves of the country fell to $16.668 billion by week ended April 23, 2022 as compared with $17.045 billion by week ended April 16, 2022.

    READ MORE: Dollar ends Rs187.53 at interbank market close

    Pakistan total import bills recorded an increase of 49 per cent to $58.87 billion during the first nine months of the current fiscal year as compared with $39.49 billion in the corresponding period of the last fiscal year.

    This resulted in huge widening in trade deficit of 70 per cent. The trade deficit of the country swelled to $35.39 billion during first nine months of the current fiscal year as compared with the deficit of $20.8 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee falls Rs187.50 to dollar at market open

  • Dollar makes new high at Rs191.50 in midday trading

    Dollar makes new high at Rs191.50 in midday trading

    KARACHI: The Pakistan Rupee (PKR) crashed to new record low at Rs191.50 to the dollar in midday trading of interbank foreign exchange market on Thursday.

    The exchange rate witnessed a decline of Rs1.48 and is trading at Rs191.50 to the dollar from previous day’s closing of Rs190.02 in the interbank foreign exchange market.

    Currency experts said that balance of payment crisis were impacting the rupee value. They said that high import payment and scheduled repayment of foreign debt had increased dollar demand.

    READ MORE: Rupee crashes to record low at Rs190.02 against dollar

    The rupee has fallen sharply during first three days of the current week.

    Pakistan is net importer of petroleum products to meet its domestic demand. The country’s import bill was $14.81 billion during the first nine months (July – March) 2021/2022 as compared with $7.55 billion in the corresponding period of the last fiscal year, showing a massive growth of 96 per cent. The oil bill is around 25 per cent of the total import bill of country.

    READ MORE: Rupee hits all-time low at Rs188.66 to dollar

    The depleting foreign exchange reserves are also putting pressure on the local currency.

    According to details released by the State Bank of Pakistan (SBP), the official reserves of the central bank fell by $328 million to $10.558 billion by the week ended April 23, 2022 as compared with $10.886 billion a week ago. The net foreign exchange reserves of the SBP also include $3 billion from Saudi Arabia, which was deposited with the central bank to support balance of payment.

    The foreign exchange reserves of the country fell to $16.668 billion by week ended April 23, 2022 as compared with $17.045 billion by week ended April 16, 2022.

    READ MORE: Dollar ends Rs187.53 at interbank market close

    Pakistan total import bills recorded an increase of 49 per cent to $58.87 billion during the first nine months of the current fiscal year as compared with $39.49 billion in the corresponding period of the last fiscal year.

    This resulted in huge widening in trade deficit of 70 per cent. The trade deficit of the country swelled to $35.39 billion during first nine months of the current fiscal year as compared with the deficit of $20.8 billion in the corresponding months of the last fiscal year.

    READ MORE: Rupee falls Rs187.50 to dollar at market open