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  • SBP foreign exchange reserves slip to $9.96 billion

    SBP foreign exchange reserves slip to $9.96 billion

    KARACHI: The official foreign exchange reserves of State Bank of Pakistan (SBP) fell by $146 million to $9.961 billion by week ended June 19, 2020, according to weekly data of foreign exchange reserves of the country issued by the SBP on Thursday.

    The official reserves of the central bank were at $10.107 billion by week ended June 12, 2020.

    The SBP said that during the week ended June 19, 2020, SBP reserves decreased by $146 million to $ 9,961.2 million. This decline is attributed to government external debt payments of $ 244.5 million.

    During the current week, SBP has received around $1,725 million, including $725 million from the World Bank, US$500 million from Asian Development Bank and US$500 million from Asian Infrastructure Investment Bank.

    These funds will be part of SBP weekly reserves data as of 26-June-2020 to be released on 02-July-2020.

    The total foreign exchange reserves of the country fell by $45 million to $16.73 billion by week ended June 19, 2020 as compared with $16.775 billion a week ago.

    However, the foreign exchange reserves of commercial banks increased by $101 million to $6.769 billion by week ended June 19, 2020 as compared with $6.668 billion a week ago.

  • SBP receives $1bn from ADB, World Bank

    SBP receives $1bn from ADB, World Bank

    KARACHI: State Bank of Pakistan (SBP) on Tuesday received $1 billion from two international financial institutions to mitigate adverse economic impact of COVID-19.

    The SBP said that it had received $500 million each from Asian Development Bank (ADB) and World Bank.

    Pakistan and three international financial institutions (IFIs) including World Bank, ADB and Asian Infrastructure Investment Bank (AIIB) have signed $1.5 billion loans agreement as each of the IFI has provided $500 million facility.

    This is concessional financing in the form of budgetary support that is being provided by the three IFIs that will help mitigate socio-economic impact of COVID-19 pandemic and strengthen health, education, and social safety nets systems.

    The Asian Development Bank is extending financial support of $500 million for this programme with the objective to support the government of Pakistan’s efforts to strengthen the health system and mitigate socio-economic impacts of the COVID-19 pandemic.

    The Asian Infrastructure Investment Bank is extending co-financing of $500 million for the CARES to augment the government’s efforts to mitigate the direct and indirect impacts of COVID-19 pandemic

    The scope of the CARES programme covers: (i) social protection for the poor and vulnerable, (ii) an expanded health sector response to the pandemic; and (iii) a pro-poor fiscal stimulus package to ensure recovery in growth and employment.

    Securing Human Investments to Foster Transformation (SHIFT) $500 million: It aims to strengthen the Civil Registration and Vital Statistics, health and education systems essential for human capital accumulation; recognise and support the contribution of women to economic productivity; and improve efficiency of the national safety nets.

    Noor Ahmed, Secretary Ministry of Economic Affairs, signed the three loan agreements on behalf of government of Pakistan, while Patchamuthu Illangovan, Country Director WB Ms Xiaohong Yang, Country Director, ADB and Konstantin Limitovsriy, Vice President, AIIB signed agreements on behalf of the World Bank, Asian Development Bank and AIIB respectively.

  • SBP develops regulatory framework for cross border e-commerce

    SBP develops regulatory framework for cross border e-commerce

    ISLAMABAD: State Bank of Pakistan (SBP) has developed regulatory framework for facilitation of cross border B2C e-commerce.

    However, this will be adopted after integration with the e-Commerce to be developed by Federal Board of Revenue (FBR) in WeBOC (Web Based One Customs).

    The officials of SBP shared this information at the second meeting of National e-Commerce Council, chaired by Abdul Razak Dawood, Advisor to the Prime Minister on Commerce and Investment on Thursday.

    All of the nominated members of the Council, including State Bank of Pakistan, Ministry of IT & Telecom, Federal Board of Revenue, Securities and Exchange Commission of Pakistan, National Information Technology Board, Provincial Departments of Industries and Commerce, Provincial Revenue Authorities, Pakistan Post, Federal and Provincial Consumer Rights Commission/Councils, Telecom companies, online marketplaces, Fintech sector representatives, Freelancers, Banking sector and Logistics companies attended the meeting.

    The Advisor briefed the participants about the progress achieved in the past months on the e-Commerce Policy, since its approval on October 01, 2019.

    He appreciated the coordinated efforts of public and private sector for the effective implementation of the policy.

    Talking to the participants, Razak Dawood underlined that the trend of e-commerce has increased rapidly in the recent years with the development and easy accessibility of the internet.

    He added that, due to the covid-19 pandemic, the importance of e-Commerce has increased manifolds, making it an extremely vital sector for the economy.

    He stressed the importance of directing the resources towards digital adoption and connecting the SMEs to e-platforms across the globe, while exploring new market access opportunities for them.

    Punjab and Khyber Pakhtunkhwa Revenue Authorities apprised the participants of the incentives being announced for Digital and e-Commerce sector in the provincial budgets to support these sectors during these challenging circumstances.

    Representatives from Consumer Protection Councils of Punjab and Lahore and from Consumer Rights Commission of Pakistan informed that, in line with the directions of the e-Commerce Policy, Federal and Provincial Consumer Acts are being amended to include the subject of e-Commerce and the disputes arising from this sector.

    They added that webinars are being planned to educate academia and train the judicial officers on the subject of consumer protection.

    SECP shared with the participants that several new initiatives are being planned to promote e-Commerce, including introduction of a separate sectoral classification of e-Commerce.

     So far 152 businesses have registered on their portal, which has reduced the time of a company registration to 4 hours.

    Secretary Commerce told the participants that Ministry of Commerce is continuously engaged with its foreign trade missions for promoting Pakistani trade and exploring new markets for its exporters.

    In this regard, a new development is registration of Pakistani sellers with Amazon. Initially, a list of 38 exporters has been communicated to Amazon, which is limited to Surgical & Sports Goods and Home Textiles Sectors but will be expanded to other sectors in near future, after a successful trial of these shortlisted companies.

    A video message from the Director General-WTO, appreciating Pakistan’s e-Commerce Policy being a step in the right direction, was also shared with the participants.

  • Foreign exchange reserves up by $70 million

    Foreign exchange reserves up by $70 million

    KARACHI: The foreign exchange reserves of the country have increased by $70 million to $16.775 billion by week ended June 12, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $16.705 billion by week ended on June 05, 2020.

    The foreign exchange reserves held by the central bank increased by $11 million to $10.107 billion by week ended June 12, 2020 as compared with $10.096 billion a week ago.

    The foreign exchange reserves held by commercial banks were also increased by $59 million to $6.668 billion from $6.609 billion a week ago.

  • ECC extends SBP’s refinance scheme with additional benefits

    ECC extends SBP’s refinance scheme with additional benefits

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved extension to the refinancing scheme of the State Bank of Pakistan (SBP) up to September 30, 2020 from June 30, 2020.

    A statement said that the ECC approved the “Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers.

    The scheme supports provision of credit at concessional rate to businesses that commit not to lay off workers till September 2020 (earlier the cutoff date was June 30, 2020), the loss coverage for SME sector has been increased to 60 percent from the existing 40 percent to promote greater take up at the smaller level of business.

    Under the new changes the borrowers having turnover up to Rs800 million can avail benefit of the scheme; earlier, for the eligibility of the scheme, the turnover limit was up to Rs 2 billion).

    Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division.

    ECC approved the following technical supplementary grants:

    1) Rs.3.2 billion for PIACL (Pakistan International Airline corporation Limited) to discharge the obligations on account of markup against GoP guaranteed loans.

    2) Rs25,206,953 in favor of Pakistan Academy for Rural Development (PARD) Peshawar for the current financial year.

    3) Rs. 1300 million to Pakistan Atomic Energy Commission to discharge its various liabilities

    4) Rs 235 million to Deputy Commissioner Islamabad for making payment of internal security duty allowance to troops of Pakistan Rangers (Punjab) deployed in Islamabad

    5) Rs 500 million to the Ministry of Information and Broadcasting to meet the expenditure of media campaign on Covid-19

    6) Rs 100 million for National Disaster Management Authority (NDMF) for procuring equipment for locust control in Punjab

    7) Rs 7.947 billion to NDMA on account of procurement of emergency equipment through Pakistan Foreign Mission in China (Ex-post Facto approval on account of Pakistan National Emergency Preparedness and Response for Covid-19, procurement of equipment and transfer of funds)

    8) Rs.4.5 billion for the capacity building of Civil Armed forces as requested by the Ministry of Interior

    9) Rs.80 million for Competition Commission of Pakistan for different expenses

    10) Rs 100 million for the purchase of kerosene oil by Head Quarters Frontier Corps KP (North) to be used in different locations posts (8000 feet and above)

    11) Rs.8.093 million for the Privatization Division for employee related expenditure

    12) Two TSGs amounting to Rs 1192.325 million and Rs 358.506 million for Ministry of Federal Education and Professional Training for the Award of Scholarships to Afghan students ECC also granted approval for book value adjustment of overdue amount of loans amounting to Rs 30.807 billion to Earth Quake Reconstruction and Rehabilitation Authority over and above its allocated development and non-development budget.

    It also allowed, on the recommendation of the committee earlier constituted by ECC, to convert two relent Chinese loans in to Government loans keeping in view the subsuming of ERRA into NDMA and ERRA being non-profit/ non revenue generating entity. ECC also approved the “handing over of Pakistan Machine Tool Factory to Strategic Plans Division.

    For the purpose of operationalization of PMTF, Rs 500 million shall be provided to SPD as a loan.

    The Federal Government shall pay all the liabilities accrued till the transfer of management control of PMTF to SPD, after partial settlement of liabilities of Rs 1.78 billion.

  • Remittances fall by 18.6 percent in May 2020

    Remittances fall by 18.6 percent in May 2020

    KARACHI: The inflow of workers’ remittance has registered 18.6 percent decline in May 2020 due to job losses and closure of borders due to coronavirus.

    The inflow of workers’ remittances was at $429.2 million in May 2020 as compared with $2.3 billion in the same month of the last year, showing decline of 18.6 percent, State Bank of Pakistan (SBP) said on Friday.

    During this pandemic situation, job losses of overseas workers and closure of international borders are the main factors affecting remittances’ flow. Moreover, in last year, the whole month of Ramadan fell in May 2019, the SBP said.

    During May 2020, workers’ remittances stood at $1,872.8 million, showing an increase of $82.8 million or 4.6 percent over previous month (April 2020, $1,790.0 million).

    Workers’ Remittances amounted to US $ 20,654.5 million during July – May FY20, up by 2.7 percent or US $ 551.5 million over July – May FY19 (US $ 20,103.0 million).

    Major contribution to workers’ remittances during May 2020 came from Saudi Arabia (US $ 436.2 million), USA (US $ 428.3 million), UAE (US $ 323.4 million) and UK (US $ 284.8 million) recording an increase of 25.7 percent and 6.6 percent for UK and USA respectively whereas a decrease of 3.4 percent and 8.6 percent for Saudi Arabia and UAE respectively as compared to April 2020.

  • Pakistan to face greater challenges in next fiscal due to COVID

    Pakistan to face greater challenges in next fiscal due to COVID

    ISLAMABAD: Pakistan is likely to face greater challenges in the next fiscal year starting July 2020 due to COVID-19, said Economic Survey 2019/2020 released on Thursday.

    “After recording its first contractionary year due to the COVID crisis since 1952, Pakistan is likely to face greater challenges in the 2020/2021 starting July 2020,” according to the survey.

    Under normal circumstances, after recording over 3 percent growth, Pakistan could have been reaping the benefits of macroeconomic stability achieved over the last year and would have embarked on a higher growth trajectory of over 4 percent.

    However, the pervasive and lasting effects of COVID-19 pose serious challenges to the economy which remains susceptible to its aftermath, despite efforts towards the outbreak’s curtailment.

    With an expected 2 percent growth for next year which is even lower than the population growth rate, challenges such as unemployment and poverty are expected to persist and amplify.

    A second round of the outbreak could further threaten macroeconomic stability and socioeconomic outcomes.

    Businesses will face liquidity issues, and many more may experience insolvency. They will require different kinds of support, for instance bailouts and provision of cheap funding, among others.

    Global trade will further dampen thereby constricting exports and remittances inflow, while domestic fiscal adjustment will become even more challenging. Higher debt accumulation will be problematic, financing for development projects may become scarce, revenues might be difficult to increase while expenditure demand may be immense.

    Synthesizing all this in an intricate policy mix has to ultimately be in place to smoothen this transition from crisis to stabilization.

  • LSM may fall massively on constrained economic environment

    LSM may fall massively on constrained economic environment

    ISLAMABAD: The production of large scale manufacturing (LSM) may fall massively during the current fiscal year as it already registered a decline of 5.4 percent during July – March 2019/2020.

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  • Agriculture sector grows by 2.67pc despite lower production of cotton, sugarcane

    Agriculture sector grows by 2.67pc despite lower production of cotton, sugarcane

    ISLAMABAD: The agriculture sector provisionally grew by 2.67 percent in 2019/2020 despite fall in production of cotton and sugarcane, revealed by Economic Survey 2019/2020 released on Thursday.

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