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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 gains 10 paisas on inflows

    Rupee gains 10 paisas on inflows

    KARACHI: The Pak Rupee gained 10 paisas against dollar on Thursday owing to inflows of export receipts and measures to facilitate home remittances.

    The rupee ended Rs166.88 to the dollar from previous day’s closing of Rs166.98 in interbank foreign exchange market.

    Currency dealers said that the rupee appreciated on inflows of export receipts during the day.

    Further, incentive scheme of State Bank of Pakistan (SBP) for promotion of home remittances also improved market sentiments.

    A day earlier, the SBP expanded incentive scheme for exchange companies for promoting home remittances through formal channels.

    The SBP previously on December 06, 2019 introduced the incentive scheme on which exchange companies were allowed market expenses reimbursement of Re. 1 per each incremental US dollar mobilized over 15 percent growth.

    The SBP in this regard decided that with immediate effect the existing incentive scheme for marketing of home remittances i.e. Re 1 against US Dollar 01 of remittance amount beyond 15 percent growth over last year may now be based on tiered growth i.e. Rs. 0.50 on 5 percent growth, Rs. 0.75 on 10 percent growth and Rs. 1.00 on 15 percent growth.

    Through another circular issued to authorized dealers in foreign exchange and microfinance banks, the SBP said that it has been decided with immediate effect that the prevailing rate of TT charges may be enhanced from SAR 10/- to SAR 20/- for transactions between USD 100-200.

    The SBP further said that the existing Incentive scheme for marketing of home remittances i.e. PKR 01 against USD 01 of remittance amount beyond 15 percent growth over last year may now be based on tiered growth i.e. Rs. 0.50 on 5 percent growth, Rs. 0.75 on 10 percent growth and Rs. 1.00 on 15 percent growth.

  • So far 80,368 borrowers avail loan rescheduling facility

    So far 80,368 borrowers avail loan rescheduling facility

    KARACHI: State Bank of Pakistan (SBP) on Wednesday said that around 80,368 borrowers availed deferment of principal repayment facility, which was granted considering outbreak of coronavirus.

    The SBP said that under the relief package up till April 10, 2020 around 80368 borrowers benefitted from deferment of principal repayment worth Rs20 billion.

    Additional Rs 1.4 billion has been restructured. Meanwhile, 5126 application were under process, the SBP said.

    Previously, the SBP through a circular noted that banks and DFIs will defer the payment of principal on loans and advances by one year.

    To avail this relaxation, borrowers should submit a written request to the banks before June 30, 2020.

    They will, however, continue to service the mark-up amount as per agreed terms and conditions.

    The deferment of principal will not affect borrower’s credit history and such facilities will also not be reported as restructured/rescheduled in the credit bureau’s data.

    The total amount of principal coming due over the next year is about Rs. 4,700 billion.

  • Rupee extends losses on import payment

    Rupee extends losses on import payment

    KARACHI: The Pak Rupee extended losses against dollar on Wednesday owing to persistent demand for import payment, dealers said.

    The rupee ended at Rs166.98 to the dollar from previous day’s closing of Rs166.95 in interbank foreign exchange market.

    The currency dealers said that the rupee was remained under pressure due to higher demand of the foreign currency for commodity payment, mainly related to holy month of Ramazan.

    Currency experts said that the rupee may make gain in coming days with expected disbursement by the IMF.

    They said that the IMF disbursement would help the country to improve foreign exchange reserves.

    The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.

    The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.

    The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

    Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.

    The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.

    However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.

    The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.

  • SBP expands incentive scheme for home remittance promotion

    SBP expands incentive scheme for home remittance promotion

    KARACHI: State Bank of Pakistan (SBP) on Wednesday expanded incentive scheme for exchange companies for promoting home remittances through formal channels.

    The SBP previously on December 06, 2019 introduced the incentive scheme on which exchange companies were allowed market expenses reimbursement of Re. 1 per each incremental US dollar mobilized over 15 percent growth.

    The SBP in this regard decided that with immediate effect the existing incentive scheme for marketing of home remittances i.e. Re 1 against US Dollar 01 of remittance amount beyond 15 percent growth over last year may now be based on tiered growth i.e. Rs. 0.50 on 5 percent growth, Rs. 0.75 on 10 percent growth and Rs. 1.00 on 15 percent growth.

    Through another circular issued to authorized dealers in foreign exchange and microfinance banks, the SBP said that it has been decided with immediate effect that the prevailing rate of TT charges may be enhanced from SAR 10/- to SAR 20/- for transactions between USD 100-200.

    The SBP further said that the existing Incentive scheme for marketing of home remittances i.e. PKR 01 against USD 01 of remittance amount beyond 15 percent growth over last year may now be based on tiered growth i.e. Rs. 0.50 on 5 percent growth, Rs. 0.75 on 10 percent growth and Rs. 1.00 on 15 percent growth.

  • Rupee ends down by 12 paisas on import payment demand

    Rupee ends down by 12 paisas on import payment demand

    KARACHI: The Pak Rupee fell by 12 paisas against dollar on Tuesday owing to higher demand of the foreign currency for import payment, dealers said.

    The rupee ended at Rs166.95 to the dollar from previous day’s closing of Rs166.83 in interbank foreign exchange market.

    The currency dealers said that the rupee was remained under pressure due to higher demand of the foreign currency for commodity payment, mainly related to holy month of Ramazan.

    Currency experts said that the rupee may make gain in coming days with expected disbursement by the IMF.

    They said that the IMF disbursement would help the country to improve foreign exchange reserves.

    The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.

    The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.

    The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

    Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.

    The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.

    However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.

    The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.

  • Banks’ lending to private sector plummets by 44pc in nine months

    Banks’ lending to private sector plummets by 44pc in nine months

    KARACHI: Banks lending to the private sector has sharply declined by 44 percent during first nine months (July – March) 2019/2020 due to slow economic activities and outbreak of coronavirus, according to data released by State Bank of Pakistan (SBP) on Monday.

    The private sector lending fell to Rs322 billion during July 01, 2019 – April 03, 2020 as compared with Rs577.37 billion during July 01 – April 05, 2019.

    Analysts said that the due to higher interest rate prevailed for the period discouraged the private sector to take loans for establishment new businesses or expansion.

    The analysts further said that lockdown after the outbreak of coronavirus (COVID-19) in Pakistan in the month of February 2020 further hampered the business activities.

    The data showed that conventional banks had extended private sector loans to the tune of Rs134.79 billion during first nine months of current fiscal year as compared with Rs396.58 billion in the corresponding months of the last fiscal year.

    The private sector credit off-take from Islamic banks also fell to Rs67.93 billion during the period under review as compared with Rs78.69 billion in the same period of the last fiscal year.

    The loans disbursed to private sector by Islamic Banking Branches of Conventional Banks witnessed increase to Rs119.2 billion during July – March 2019/2020 as compared with Rs102 billion in the same period of the last fiscal year.

  • Rupee eases by four paisas on import demand

    Rupee eases by four paisas on import demand

    KARACHI: The Pak Rupee fell by four paisas on Monday owing to demand for import payment as market opened after two weekly holidays.

    The rupee ended at Rs166.83 to the dollar from last Friday’s of Rs166.79 in interbank foreign exchange market.

    The rupee was under pressure during the day due to demand for import payment, especially related to commodities used during the holy month of Razaman.

    Currency experts said that the rupee may make gain in coming days with expected disbursement by the IMF.

    They said that the IMF disbursement would help the country to improve foreign exchange reserves.

    The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.

    The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.

    The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

    Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.

    The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.

    However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.

    The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.

  • SBP allows loan at 4 percent to active taxpayers for salaries payment

    SBP allows loan at 4 percent to active taxpayers for salaries payment

    KARACHI: The State Bank of Pakistan (SBP) on Friday introduced a soft loan scheme at four percent for persons appeared on Active Taxpayers List (ATL) for payment of salaries and wages to their employees during financial challenges of lockdown to contain coronavirus spread.

    (more…)
  • Rupee gains 40 paisas on funds inflow expectations

    Rupee gains 40 paisas on funds inflow expectations

    KARACHI: The Pak Rupee gained 40 paisas against dollar on Friday as expectation of improved foreign exchange reserves following disbursement of payment by the IMF.

    The rupee ended at Rs166.79 to the dollar from previous day’s close of Rs167.19 in interbank foreign exchange market.

    The rupee made gain for the third consecutive days owing to reports that the IMF board meeting scheduled for next week may approve $1.4 billion for Pakistan.

    Currency experts said that the IMF disbursement would help the country to improve foreign exchange reserves.

    The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.

    The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.

    The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

    Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.

    The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.

    However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.

    The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.

  • Bank deposits hit record high at Rs15.13 trillion

    Bank deposits hit record high at Rs15.13 trillion

    KARACHI: Bank deposits hit record high at Rs15.13 trillion by end of March 2020, according to data released by State Bank of Pakistan (SBP).

    The deposits of the banking sector grew by 12.4 percent YoY and 2.1 percent MoM in March 2020 to Rs15.13 trillion. The deposits are also up 3.4 percent in YTD 2020.

    Analysts at Topline Securities said that banks’ focus for deposit mobilization remained more towards Investments compared to Advances during the period given the high yields on govt. papers.

    As a result, Investments grew by 61.7 percent YoY and 6.6 percent MoM to Rs9.30 trillion in March 2020, with Investment to Deposit Ratio (IDR) increasing to 61.5 percent in March 2020 from 42.7 percent in March 2019 and 58.9 percent in Feb-2019. The Investments are also up 5.6 percent in YTD 2020.

    On the other hand, Advances grew by just 4.7 percent YoY and 0.6 percent MoM in March 2020 hindered by high interest rates and slowdown in overall economic activity.

    The Advances are up only 1.2 percent during YTD 2020. As a result, ADR dropped to 54.6 percent in March 2020 from 58.6 percent in March 2019 and 55.4 percent in Feb-2020.

    As per the available 2M2020 numbers, Advances to the textile and consumer sectors increased by 9 percent YoY each.

    The Currency in Circulation (CIC) in YTD 2020 has registered an increase of 6.5 percent to Rs5.6 trillion. Additionally, CIC as a percentage of M2 clocked in at 29 percent above the historic 5-year average of 27 percent.

    Going forward, we see limited Deposit growth in the range of 6-7 percent during 2020 (vs. historical average 3-year growth of 11 percent), in line with the nominal GDP growth amidst slowdown in economic activity because of the outbreak of Covid-19. We expect Advances to grow by around 5 percent during the year (vs. historical average 3-year growth of 14 percent).