Category: Finance

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  • Foreign investment falls 81 percent during July – November

    Foreign investment falls 81 percent during July – November

    KARACHI: The inflow of total foreign investment fell by around 81 percent during first five months of the current fiscal year due to outflow of investment from debt securities.

    According to data released by State Bank of Pakistan (SBP) on Wednesday the foreign public investment fell by 112.5 percent mainly due to outflow in debt securities.

    The investment in debt securities witnessed outflow of $142 million during first five months of the current fiscal year as compared with inflows of $1.13 billion in the same period of the last fiscal year.

    The other segment of total investment i.e. foreign private investment witnessed a decline of 40 percent during the period under review.

    The foreign private investment fell to $531.6 million during July – November of the current fiscal year as compared with $884 million in the corresponding period of the last fiscal year.

    Under the head of foreign private investment, the inflow of direct investment witnessed 17 percent to $717 million during first five months of the current fiscal year as compared with $864.4 million in the same period of the last fiscal year.

    The investment in capital market witnessed massive outflow during the period. The portfolio investment during first five months of the current fiscal year witnessed outflow of $185.8 million as compared with inflow of $19.5 million in the same period of the last fiscal year.

  • Foreign exchange reserves increase by $160 million

    Foreign exchange reserves increase by $160 million

    KARACHI: The liquid foreign exchange reserves of the country have increased by $160 million to $20.402 billion by week ended December 04, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.242 billion by week ended November 27, 2020.

    During the week ended December 04, 2020, SBP received $359 million from multilateral/bilateral sources including $307 million from Asian Development Bank (ADB).

    After accounting for external debt repayments, SBP reserves increased by $188 million to $13.298 billion.

    The foreign exchange reserves held by commercial banks however fell by $27 million to $7.104 billion by week ended December 04, 2020 as compared with $7.131 billion a week ago.

  • National Savings tightens checks on investors

    National Savings tightens checks on investors

    ISLAMABAD: The government has tightened monitoring of investors of national savings to comply with conditions of Financial Action Task Force (FATF) and prevent transactions related to money laundering and terror financing.

    The Central Directorate of National Savings (CDNS) has prepared a comprehensive plan to examine the customers and issued instructions to all its regional offices in the country.

    The plan has been prepared by the National Savings (AML&CFT) Supervisory Board in consultation with the Financial Monitoring Unit (FMU).

    Under the plan the offices of the national savings have been advised to follow the guidelines in examining and monitoring the customs of the saving certificates and prize bonds.

    All those customers will be examined where overall investment quantum, account balance or transactional activity is not in line with their businesses, known means or stated purpose of products.

    The authorities issued red flags for transactional patterns related to all products, including certificates, accounts and prize bonds.

    Following are the red flags to identify suspicious transactions:

    ·         Nominee is not a close relative or change in nominee (for instance, to include non-family members).

    ·         Third party check is provided for investment.

    ·         Purchase of a long-term investment product followed shortly thereafter by a request to liquidate the position to get back the invested amount.

    ·         Overall investment quantum, account balance or transactional activity is not in line with the customer’s business, known means or stated purpose of the product.

    ·         Client is frequently purchasing savings certificates / prize bonds through unusual payments in cash which do not commensurate with his/her profile.

    ·         Unusually high levels of investments or unusually large transactions in relation to what might reasonably be expected of clients with a similar profile.

    ·         When transactions are conducted without any apparent legitimate or economic reason.

    ·         Where multiple deposits are made by unrelated individuals.

    ·         Large cash is deposited followed by early withdrawal.

    ·         Where large deposits and withdrawals are made routinely, and the end of day balance is very low or nil.

    ·         When a customer insists to buy multiple savings certificates/prize bonds through structured/broken cash transactions to avoid CTR reporting threshold (PKR 2.0 Million and above).

    ·         Two or more customers (Linked/associated with each other) working together to break one cash transaction into two or more transactions to evade the CTR reporting requirement.

    ·         Purchase of higher denomination Prize Bonds against cash without providing any plausible justification.

    ·         Encashment of higher denomination Prize Bonds without any plausible justification.

    ·         When a customer is frequently converting one product into another (especially in the name of an unrelated third party) without any plausible justification.

    ·         Numerous prizes are repeatedly/very frequently being claimed by the customer against winning prize bonds during a short span of time.

  • World Bank approves $300 million for two projects in Pakistan

    World Bank approves $300 million for two projects in Pakistan

    ISLAMABAD: The executive board of the World Bank has approved $300 million for financing two projects in Pakistan – the Sindh Resilience Project and the Solid Waste Emergency and Efficiency Project.

    These investments will bolster Pakistan’s efforts to build resilience to natural hazards such as floods and droughts in the Sindh province, and will strengthen solid waste management in Karachi to tackle recurrent urban flooding and public health emergencies in the city, the World Bank said in a statement on Wednesday.

    “Building resilience to natural disasters and health emergencies is an important and urgent agenda in Pakistan, that will help save lives and protect the economy,” said Najy Benhassine, World Bank Country Director for Pakistan.

    “The debilitating impact of recent floods in Karachi, droughts and extreme rainfall in Sindh, and of course the COVID-19 pandemic, make it imperative that risk reduction investments strengthen multi-sectoral dialogue and coordination at the city, provincial, and national levels to ensure protections for vulnerable communities and fight the spread of disease.”

    The US$200 million Sindh Resilience Project Additional Financing will help the government better manage climate and disaster risks, including floods, droughts, and public health emergencies.

    The project will strengthen linkages between disaster risk management and the health sector by establishing the Sindh Emergency Service to strengthen capacity for disaster preparedness and emergency response, including health crises such as COVID-19.

    The project also improves irrigation infrastructure to protect vulnerable communities living in rural areas, which will directly benefit 750,000 citizens in drought-prone areas of Kirthar range hills and the Nagarparkar region in the Tharparkar District.

    “The establishment of Sindh Emergency Service will greatly enhance the government’s responsiveness to natural disasters and emergencies, particularly in a megacity like Karachi where many lives are lost due to insufficient emergency medical services,” said Ahsan Tehsin, Task Team Leader for the Sindh Resilience Project.

    “The project will also improve water security for rural communities that suffer from chronic malnutrition and poverty and are forced to migrate due to water insecurity.”

    The US$100 million Solid Waste Emergency and Efficiency Project (SWEEP) will improve solid waste management services in Karachi – Pakistan’s largest city of more than 16 million people – and upgrade critical solid waste infrastructure to reduce urban flooding and public health risks.

    The project focuses on emergency waste removal to restore stormwater drainage capacity before the next monsoon season, especially in vulnerable communities around drainage and waste collection sites.

    The project will improve living conditions for at least half a million residents of Karachi and increase protections for workers by introducing safety protocols that improve labor conditions.

    SWEEP also addresses deficiencies in existing solid waste infrastructure by constructing and upgrading critical infrastructure, such as collection, transfer and disposal facilities.

    It also leverages the Competitive and Livable City of Karachi Project (approved on June 27, 2020) to advance long-term planning, policy reforms, and behavioral changes required to improve the solid waste management sector.

    “Engaging citizens and community members, including informal workers, is essential for sustainable and safer waste management solutions,” said Suhaib Rasheed, Task Team Leader for the Solid Waste Emergency and Efficiency Project. “Equally important is a focus on financial sustainability, which will require continued efforts to develop private sector partnerships and sustainable revenues streams to offset the costs of delivering these vital services.”

  • Pakistan’s exports grow by 2.11 percent in five months

    Pakistan’s exports grow by 2.11 percent in five months

    ISLAMABAD: Pakistan’s exports have shown resilience amidst global economic challenges, recording a 2.11% increase to $9.737 billion in the first five months (July – November) of the current fiscal year 2020/2021, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

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  • Country’s weekly FX reserves ease by $311 million

    Country’s weekly FX reserves ease by $311 million

    KARACHI: The liquid foreign exchange of reserves of the country fell by $311 million to $20.241 billion by week ended November 27, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $20.552 billion by week ended November 20, 2020.

    The official reserves of the SBP fell by $305 million to $13.11 billion by week ended November 27, 2020 as compared with $13.415 billion a week ago.

    The SBP attributed the decline in official reserves to scheduled external debt payment by the government.

    The foreign exchange reserves held by commercial banks also eased by $6 million to $7.131 billion by week ended November 27, 2020 as compared with $7.137 billion a week ago.

  • ECC withdraws regulatory duty on cotton yarn import

    ECC withdraws regulatory duty on cotton yarn import

    ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approval removal of 5 percent regulatory duty on import of cotton yarn.

    The Ministry of Commerce presented a proposal before the ECC regarding removal of 5 percent regulatory duty on import of cotton yarn till June 30, 2021. After detailed discussion, the chair approved the removal of regulatory duty on import of cotton yarn to enhance value-added exports.

    Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired the meeting of the ECC of the Cabinet in Islamabad.

    Minister for Planning, Development and Special Initiatives Asad Umar, Minister for Production and Industries Hammad Azhar, Minister for Privatization Muhammad Mian Soomro, Adviser to the PM on Commerce Abdul Razak Dawood, Minister for Power Omar Ayub Khan, Minister for Maritime Affairs Syed Ali Haider Zaidi, SAPM on Petroleum Nadeem Babar, SAPM on Revenue Dr. Waqar Masood and Adviser to the PM on Institutional Reforms and Austerity Ishrat Hussain also participated in the meeting. Governor State Bank of Pakistan Dr. Reza Baqir joined the meeting through video link.

    The Ministry of Commerce submitted another summary to re-consider the earlier decision taken by ECC dated October 19, 2020 regarding procedure for registration under concessionary regime of electricity, RLNG and Gas in export oriented sectors (erstwhile zero-rated sectors). After due deliberation, the chair directed to maintain status quo with a condition that FBR may register new manufacturers or exporters in five export oriented sectors (erstwhile five zero-rated sectors) in coordination with the Ministry of Commerce till June, 2021.

    Communication Division requested ECC for conversion of National Highways Authority loans into Government Grant or grant a waive-off for a much needed fiscal space. A detailed presentation was made before the forum to remodel NHA as a self-sustaining and performance based organization. ECC directed to constitute a sub-committee under the Chairmanship of Minister for Planning, Development and Special Initiatives and would include SAPM Nadeem Babar, Minister for Maritime Affairs Ali Zaidi, Secretary Finance and Secretary Communications to prepare a holistic proposal suggesting revenue generation roadmap for NHA within a month.

    NHA was also granted a one-month moratorium to work out details and present recommendations regarding financial viability of NHA before the forum.

    The ECC recommended a summary presented by the Industries and Production Division to approve release of funds to PSM for payment in lieu of gas supply to SSGC through a Technical Supplementary Grant (TSG).

    ECC approved allocation of upto 9.5 MMCFD gas from M/s PPL’s Benari X-I discovery to SSGCL. Similarly, allocation of 10 MMCFD gas from PPL’s Hadaf X-I to SSGCL was also approved during the meeting. Federal Minister for Maritime Affairs raised the matter of priority berthing for wheat and sugar.

    The ECC directed the Logistics Committee to ensure berthing of wheat and sugar vessels on priority, keeping in view, that other imports are not affected.

    The ECC also accorded approval for allocation of additional funds for maintenance of Islamabad High Court Building and Judges Residences through TSG as requested by the Ministry of Housing and Works.

    The agenda item on Karachi Transformation Plan, presented by the Ministry of Planning, Development and Special Initiatives was deferred to the next ECC meeting for a detailed discussion.

  • Headline inflation contracts at 8.3 percent in November

    Headline inflation contracts at 8.3 percent in November

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) in Pakistan witnessed a contraction of 8.3 percent on a Year-on-Year (YoY) basis in November 2020, according to data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.

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  • Rising coronavirus cases may impact revenue collection in second quarter

    Rising coronavirus cases may impact revenue collection in second quarter

    ISLAMABAD: The ministry of finance has said that the rising cases of coronavirus may slowdown economic activities and adversely impact revenue collection in second quarter (October – December) of the current fiscal year.

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  • Country’s weekly foreign exchange reserves increase by $467 million

    Country’s weekly foreign exchange reserves increase by $467 million

    KARACHI: The liquid foreign exchange reserves of the country have increased by $467 million to $20.552 billion by week ended November 20, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.085 billion by week ended November 13, 2020.

    The official reserves of the SBP increased by $484 million to $13.415 billion by week ended November 20, 2020 as against $12.931 billion a week ago.

    The SBP attributed the increase to official government inflows.

    The reserves held by commercial banks eased by $17 million to $7.137 billion by week ended November 20, 2020 as against $7.154 billion a week ago.