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  • Foreign exchange reserves flat at $23.21 billion

    Foreign exchange reserves flat at $23.21 billion

    KARACHI: The foreign exchange reserves of the country registered nominal fall of $7 million to $23.213 billion by week ended April 16, 2021, State Bank of Pakistan (SBP) on Thursday.

    The foreign exchange reserves of the country were $23.22 billion by week ended April 09, 2021.

    The official foreign exchange reserves of the SBP fell by $62 million to $16.044 billion by week ended April 16, 2021 from $16.106 billion a week ago.

    However, foreign exchange reserves maintained by commercial banks increased by $55 million to $7.169 billion by week ended April 16, 2021 as compared with $7.114 billion a week ago.

  • Foreign direct investment plunges by 35pc in nine months

    Foreign direct investment plunges by 35pc in nine months

    KARACHI: The influx of foreign direct investment (FDI) into Pakistan has plummeted by 35 percent during the first nine months (July – March) of the fiscal year 2020/2021, as per data released by the State Bank of Pakistan (SBP) on Monday.

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  • Pakistan exports textile products worth $11.35bn in nine months

    Pakistan exports textile products worth $11.35bn in nine months

    KARACHI: Pakistan has exported textile products worth $11.35 billion during first nine months (July – March) 2020/2021, showing 9 percent growth, according to data released by Pakistan Bureau of Statistics (PBS) on Saturday.

    The exports of textile products during the first nine months of the last fiscal year were at $10.41 billion, the PBS reported.

    In terms of volume the export of knitwear was on the top in textile exports. The country exported knitwear products worth $2.78 billion during first nine months of the current fiscal year as compared with $2.29 billion in the corresponding months of the last fiscal year, showing a growth of 21 percent.

    The export of readymade garments was recorded at $2.27 billion during July – March 2020/2021 as compared with $2.17 billion in the corresponding period of the last fiscal year.

    The export of bedwear recorded 16.5 percent growth to $2.05 billion during first nine months of the current fiscal year as compared with $1.76 billion in the corresponding period of the last fiscal year.

    The export of textile products in the month of March 2021 recorded 30 percent growth to $1.35 billion when compared with $1.04 billion in the same month of the last year.

  • Pakistan foreign exchange reserves increase to $23.22 billion

    Pakistan foreign exchange reserves increase to $23.22 billion

    KARACHI: The foreign exchange reserves of the country have increased by $2.54 billion to $23.22 billion by week ended April 09, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.679 billion by week ended April 02, 2021.

    The official foreign exchange reserves of the State Bank increased by $2.579 billion to $16.106 billion by week ended April 09, 2021 as compared with $13.527 billion a week ago.

    The increase in reserves has been attributed to receipt of proceeds of $2.5 billion against issuance of Pakistan Euro Bonds.

    The foreign exchange reserves held by commercial banks eased by $38 million to $7.114 billion by week ended April 09, 2021 as compared with $7.152 billion a week ago.

  • ECC approves customs duty withdrawal on cotton, yarn import

    ECC approves customs duty withdrawal on cotton, yarn import

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the withdrawal of customs duty to ensure smooth supply of cotton and cotton yarns to the value-added industry, while bridging the gap between domestic production and overall demand for the inputs.

    Federal Minister for Finance, Revenue, Industries and Production, Muhammad Hammad Azhar, chaired the ECC meeting.

    Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Maritime Affairs Ali Haider Zaidi, Federal Minister for Energy Omar Ayub Khan, Federal Minister for National Food Security and Research Syed Fakhar Imam, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Revenue Dr. Waqar Masood, SAPM on Power and Petroleum Tabish Gauhar, Federal Secretaries, senior representatives of Provincial governments, Chairman BOI and other senior officers participated in the meeting. Governor State Bank of Pakistan joined through a video link.

    Power Division presented a summary regarding waiver of minimum 66% Take-or-Pay commitment in Power Purchase Agreement(s) (PPA) & Gas Supply Agreement(s) (GSA) of three RLNG based Public Sector Power Plants namely Quaid-e-Azam Thermal Power Plant, Balloki Power Plant and Haveli Bahadur Shah Power Plant.

    These amendments would envisage submission of a Monthly Production Plan (MPP) as a binding on the Power Purchaser and the Power Seller wherein the Power Purchaser shall be entitled to submit demand requirement as needed, at least seventy five days before the start of each such month, which will be finalized by the System Operator and Operating Committee under the PPA.

    The concept of a Monthly Delivery Plan (MDP) for deliveries of Gas under the GSA, has been paired with the Monthly Schedule as provided under PPA. The MPP will come into effect from the year 2022.

    After seeking input from relevant stakeholders, the Committee approved the summary and appreciated the concept of Monthly Production Plan (MPP) as a cost-effective solution, enabling the Power and Gas purchasers to make requisite purchases in line with actual requirements instead of following a fixed arrangement.

    Power Division also presented another summary proposing amendment to the Facilitation Agreement and Amendment to the GoP Guarantee Agreement with KAPCO. It included the proposal that the project may be withdrawn from the Privatization Commission and entrusted to Private Power and Infrastructure Board (PPIB).

    After due deliberation, the Committee approved the summary, in principle, subject to formal vetting by the Law Division. Secretary, M/o Commerce presented a summary before the ECC for withdrawal of Customs Duty on import of Cotton Yarns under PCT 5205, 5206 and 5207 till 30th June, 2021.

    The ECC also approved a Technical Supplementary Grant for Finance division amounting to Rs.11.7 billion as the share of the Federal Government for the establishment of 4 mother and child hospitals in Punjab.

  • SBP receives $2.5bn of Eurobonds issuance

    SBP receives $2.5bn of Eurobonds issuance

    KARACHI: State Bank of Pakistan (SBP) on Thursday said that it has received government proceeds of $2.5 billion Eurobonds issuance in its account.

    The central bank in a tweet said that as a result of current transfers, the SBP’s foreign exchange reserves are closed above $16 billion on Thursday, the highest level since July 2019.

    Earlier, a statement issued from Islamabad said that Pakistan had entered the international capital market after a gap of over three years by successfully raising USD 2.5 billion through a multi-tranche transaction of 5-, 10- and 30-year Eurobonds.

    The transaction generated great interest as leading global investors from Asia, Middle East, Europe and the US participated in the global investor calls and the order book.

    This is for the first time that Pakistan has adopted a program-based approach with registration of Global Medium-Term Note (GMTN) program. The program will allow Pakistan to tap the market at short notice.

    The Government intends to make full use of this program and become a regular issuer in the International Capital Markets.

  • IMF projects Pakistan’s GDP growth at 5pc in FY24

    IMF projects Pakistan’s GDP growth at 5pc in FY24

    KARACHI: International Monetary Fund (IMF) has projected that Pakistan’s GDP growth may grow five percent in 2023/2024 from projected growth of 1.5 percent in the current fiscal year.

    The IMF issued country report on Pakistan’s economy on Thursday.

    According to the IMF real GDP growth is projected to remain subdued at 1.5 percent in FY 2021—consistent with the forecasted course of the pandemic and vaccinations, and global recovery in the WEO baseline— and recover to 4 percent in FY 2022 as the vaccine rollout, confidence, and investment take hold.

    Growth is expected to gradually improve, but only reach its medium-term potential of 5 percent in FY 2024, later than envisioned in the first EFF review, due to the large shock and the need for continued fiscal adjustment, which is expected to offset some of impact of the stronger private sector growth on the overall economy.

    Average CPI inflation is expected to average 8.7 percent in FY 2021 and 8 in FY 2022, as continued high food prices and energy price adjustments outweigh soft international oil prices and weak domestic demand.

    The current account deficit is forecast to widen to 1.5 percent of GDP in FY 2021, as a result of the recovery and it should continue to gradually widen toward 3 percent over the medium term with stronger imports triggered by revived domestic demand and exports.

    However, the market determined exchange rate, together with adequate monetary policy, would help strengthen reserve cover to over 3½ months of imports by FY 2025.

    — Debt is projected to enter a downward path with narrower twin deficits: public debt is forecast to fall toward 70 percent by FY 2026 and total external debt below 40 percent of GDP by FY 2024.

    Substantial risks cloud the outlook, amplified by the Covid-19 pandemic.

    These fall under four broad groups: First, high uncertainty—notably around the global recovery and thus the prospects for growth, trade, and remittances—arises from the second wave of the pandemic and emergence of new strains worldwide.

    These could reverse the current course of the pandemic in Pakistan and require additional mitigation efforts, especially if domestic vaccination efforts were to stall.

    Second, policy slippages remain a risk, amplified by weak implementation capacity and influential vested interests. This particularly affects the fiscal area and thus debt sustainability, including the risk with provinces under-delivering on their commitments to budget parameters.

    Third, failures to meet program objectives, including those related to the authorities’ AML/CFT action plan with the Financial Action Task Force (FATF), could hamper external financing and investment.

    Fourth, geopolitical tensions could increase oil prices and an adverse shift in investor sentiment affect external financing. At the same time, an upside for growth and program objectives arises from the political calendar: with the senate election having taken place in March 2021, there is a window to accelerate reforms until the general elections scheduled for August 2023.

    The Debt Sustainability Analysis confirms that public debt remains sustainable with strong policies, but also points to risks from policy slippages and contingent liabilities.

  • Country’s foreign exchange reserves ease to $20.679 billion

    Country’s foreign exchange reserves ease to $20.679 billion

    KARACHI: The liquid foreign exchange reserves of the country have declined by $157 million to $20.679 billion by week ended April 02, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.836 billion by week ended March 26, 2021.

    The official reserves of the SBP fell by $146 million to $13.527 million by week ended April 02, 2021 as compared with $13.673 billion a week ago. The SBP attributed the decline to external debt repayments.

    The foreign exchange held by commercial banks also eased by $11 million to $7.152 billion by week ended April 02, 2021 as compared with $7.163 billion a week ago.

  • PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday recommended to present restructuring plan of Pakistan International Airlines Corporation Limited (PIACL) before the federal cabinet after reconciliation of tax liabilities.

    Sources in Large Taxpayers Office (LTO) Karachi said that billions of rupee as tax liability was pending against the PIACL.

    Federal Minister for Finance, Revenue, Industries and Production, Muhammad Hammad Azhar, chaired the meeting of the ECC.

    After detailed consultation, the ECC recommended the restructuring plan of PIACL for onward submission before the Cabinet, after reconciliation of tax liability figures, with a direction to place a cap on future debt which PIACL could take against its improved balance sheet, once restructuring plan is implemented.

    Earlier, the Aviation Division submitted a summary before the ECC regarding restructuring plan of the Pakistan International Airlines Corporation Ltd (PIACL).

    The Adviser to the Prime Minister for Institutional Reforms and Austerity made a detailed presentation on human resource and operational restructuring of the PIACL.

    He drew attention to the various options for restructuring and outlined measures to minimize losses and transform PIACL into a financially viable entity.

    It included human resource restructuring through Voluntary Separation Scheme (VSS), hiring Aviation experts, fleet modernization, routes rationalization, product development and revenue enhancement measures.

    Power Division presented a summary for a one-time grant to GENCOs for onward payment to DISCOs regarding the actuarial value of pension and pensionary benefits of surplus employees and also taking over the liability for payment of pension to existing pensioners of power plants which are decided to be closed immediately by the Cabinet Committee on Energy (CCOE).

    After seeking detailed input from relevant stakeholders, the Committee directed the Power Division to deliberate further and present options for cost optimization regarding pension liabilities.

    The Following Technical Supplementary Grants were approved by the ECC: –

    • Rs.330 million for the Ministry of Defence for the maintenance of aircrafts.

    • Rs.2382 million for the Ministry of Federal Education and Professional Training for the Prime Minister’s Special Package to implement “Skill for All” strategy for TVET sector.

    • Rs.1 billion for the Finance Division to refund the balance amount of funds of Insaf Imdad Ehsas Program.

    • Rs.382.280 million for the Ministry of Energy for completion of development schemes of Sindh and Balochistan provinces under PSDP.

    • Rs.150 million for the Ministry of Housing and Works for funding civil works on different schemes in Balochistan, under PSDP.

    • Rs.30 million for the Board of Investment for different operational expenses.

    • Rs.280 million for the Ministry of Information Technology and Telecommunications for consultancy and implementation of Internet voting (I-voting).

    Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Omar Ayub Khan, Federal Minister for Privatization Muhammad Mian Soomro, Minister for National Food Security and Research Syed Fakhar Imam, Advisor to the Prime Minister for Institutional Reforms and Austerity Dr. Ishrat Hussain, Advisor to the Prime Minister for Commerce Abdul Razzak Dawood, SAPM on Power Tabish Gauhar, SAPM on Revenue Dr. Waqar Masood, Federal Secretaries, Governor State Bank of Pakistan Reza Baqir, Chairman BOI and other senior officials participated in the meeting.