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MANILA, PHILIPPINES: The Asian Development Bank (ADB) on Friday approved $1 billion in immediate budget support to Pakistan to shore up the country’s public finances and help strengthen a slowing economy, a statement said.
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KARACHI: The Securities and Exchange Commission of Pakistan (SECP) and Asian Development Bank (ADB) jointly organized a workshop for stakeholder consultations on Financial Market Development 2020-2025, a statement said on Thursday.
The long term roadmap will be focusing on demand and supply measures to broaden and deepen the financial system in Pakistan.
Senior level representatives from the ADB, State Bank of Pakistan, SECP and representatives of stock exchange, central depository, national clearing company and market participants attended the brainstorming session.
In his welcoming remarks, SECP Chairman Aamir Khan affirmed that SECP’s foremost obligation remains towards building a regulatory environment that is sound, efficient and cost-effective.
“Yet, I am equally passionate about ensuring that it is empowering for business growth. One must not be sacrificed at the cost of the other. We need to be fiercely vigilant in the pursuit of transparency, yet be tirelessly focused on reducing regulatory barriers and cost of doing business,” said the SECP Chairman.
Regarding the projected roadmap, Khan opinioned that supporting multi-stage financing needs of start-ups and SMEs, increasing the number of retail investors, strengthening the role of institutional investors, creating an active bond market and promoting infrastructure-financing vehicles would be core constituents of the future roadmap.
However, he emphasized, the roadmap must entail a broad and deep consensus between the SECP, and other relevant stakeholders in the public and private sectors.
SECP Commissioner Securities Market, Shauzab Ali, gave his views on SECP’s approach to the reform plans already being undertaken by the regulator, challenges and opportunities.
A team of international experts facilitated the workshop with a view to consolidate market feedback on the various on the supply and demand side constraints, along with recommendations for reform.
ADB Deputy Country Director for Pakistan, Asif Cheema, stated that the proposed Financial Markets Development Program is in line with ADB’s Strategy 2030, which prioritizes the development of the financial sector and capital markets to support the development of the private sector and enhance financial stability.
This program will build upon ADB’s earlier support for development of Pakistan’s capital markets over the past two decades.
Cheema also reiterated the need for government ownership for implementation of the master plan.
KARACHI: The liquid foreign exchange reserves of Pakistan increased by $416 million to $15.993 billion by week ended November 29, 2019, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $15.577 billion a week ago.
The reserves held by the central bank grew by $431 million to $9.113 billion as compared with $8.682 billion a week ago.
The central bank said that during this fiscal year SBP reserves have increased by $1.8 billion.
The FX swaps / forward liabilities have reduced by $1.95 billion between June-October 2019.
Increase in the liquid SBP reserves and the reduction of the swaps / forward liabilities reflects the build-up of FX buffers, the SBP said.
The reserves held by commercial banks, however, reduced by $15 million to $6.88 billion by week ended November 29, 2019 as compared with $6.895 billion a week ago.
ISLAMABAD: Dr Hafeez Shaikh Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh on Wednesday said that after 15 months efforts the economic environment of Pakistan becomes more stable as being recognized by international community.
“We inherited a very grim economic situation with the debt levels and the fiscal and current account deficits reaching at the highest level, but through serious work and collaboration with international community, we have stabilised the economy and the international community is also recognising our efforts,” he said while addressing the inaugural session of the two-day conference arranged at a local hotel on the theme of “Rethinking Microfinance: Developing a New Inclusive Finance Compass”.
The adviser said that an over US$ 1 billion investment in Pakistan’s bond market and a 238 per cent growth in the foreign direct investment in the first four months of this fiscal year which comes to $650 million, were reflection of an increased level of confidence the international community had begun to show in the Pakistani market.
“Similarly, IMF applauding Pakistan for meeting all agreed structural benchmarks with comfortable margins in the first quarter, Bloomberg declaring Pakistan Stock Exchange as the world’s best performing market in last three months and now Moody’s upgrading Pakistan’s ranking from the negative to stable are positive developments and signs of the progress achieved on the economic front by the government,” he added.
He further pointed out that the government also inherited the highest ever current account deficit of $ 20 billion but this massive current account deficit was contained and turned into a surplus for the first time in many years in the month of November.
Similarly, the fiscal deficit adjusted for interest payment which is also called primary balance had also turned into a surplus in the first quarter of this year.
Dr. Abdul Hafeez Shaikh also told the participants about government efforts to boost the exports which had previously shown negative growth for five consecutive years, but because of incentives given to exporters in terms of no taxes on export sector as well as subsidization of gas and electricity and grant of additional Rs 300 billion subsidized loans, the exports had gone up by 3.4 per cent during the first four months of current fiscal year with 9.6 per cent growth recorded in the month of November alone.
“The government is working on a strategy to lead a transition away from a largely import-oriented economy to the one where the focus is on exports and earning of dollars to improve the quality of life of the common Pakistanis,” he said.
Talking about the microfinance sector, the Adviser asked the conference participants to deliberate on how the cost of doing business could be reduced in terms of reduced rate of interest and the time lost in processes, and how one could increase access or scale up and how we could enhance the impact and what exactly the impact meant in terms of jobs and tackling poverty.
“We also need to debate how we can keep learning as these are important questions that need to be debated and answered to formulate strategies for furthering growth in this sector,” he said.
Meanwhile, Adviser to PM on Finance and Revenue Dr. Abdul Hafeez Shaikh also held a detailed interaction with a group of television anchorpersons in his office.
During the informal discussion that continued for about two hours, the adviser briefed the anchors on the current state of economy with a focus on what state of economy the government inherited in 2018 and what policy steps and measures were adopted by the government for stabilisation of economy and subsequent success achieved in various areas, including 16.4 per cent revenue growth, 238 per cent growth in FDI, 3.4 per cent growth in exports in the first four months of this fiscal year as well as stabilisation of exchange rate, declaration of Pakistan Stock Exchange as the world’s best performing stock by Bloomberg and the upgradation of economic outlook of Pakistan from the negative to stable by the Moody’s.
KARACHI: Pakistan will get around Rs38 billion (£190 million) after National Crime Agency (NCA) of the United Kingdom agreed settlement after frozen funds investigation into a case of Malik Riaz Hussain.
According to a press release issued on Tuesday, the settlement includes a UK property valued at approximately £50 million.
The National Crime Agency has agreed a settlement figure with a family that owns large property developments in Pakistan and elsewhere.
The £190 million settlement is the result of an investigation by the NCA into Malik Riaz Hussain, a Pakistani national, whose business is one of the biggest private sector employers in Pakistan.
In August 2019 eight account freezing orders were secured at Westminster Magistrates’ Court in connection with funds totalling around £120 million.
These followed an earlier freezing order in December 2018 linked to the same investigation for £20 million. All of the account freezing orders relate to money held in UK bank accounts.
The NCA has accepted a settlement offer in region of £190 million which includes a UK property, 1 Hyde Park Place, London, W2 2LH, valued at approximately £50 million and all of the funds in the frozen accounts.
The assets will be returned to the State of Pakistan, the statement said.
KARACHI: State Bank of Pakistan (SBP) on Tuesday welcomed Moody’s change in outlook on Pakistan from negative to stable.
(more…)SINGAPORE: Moody’s Investors Service on Monday affirmed Pakistan’s outlook rating to stable from negative.
In a statement the Moody’s said that the change in outlook to stable is driven by Moody’s expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility. Such developments reduce external vulnerability risks, although foreign exchange reserve buffers remain low and will take time to rebuild.
Moreover, while fiscal strength has weakened with higher debt levels largely as a result of currency depreciation, ongoing fiscal reforms, including through the country’s International Monetary Fund (IMF) programme, will mitigate risks related to debt sustainability and government liquidity.
The rating affirmation reflects Pakistan’s relatively large economy and robust long-term growth potential, coupled with ongoing institutional enhancements that raise policy credibility and effectiveness, albeit from a low starting point.
These credit strengths are balanced against structural constraints to economic and export competitiveness, the government’s low revenue generation capacity that weakens debt affordability, fiscal strength that will remain weak over the foreseeable future, as well as political and still-material external vulnerability risks.
Concurrently, Moody’s has affirmed the B3 foreign currency senior unsecured ratings for The Second Pakistan Int’l Sukuk Co. Ltd. and The Third Pakistan International Sukuk Co Ltd. The associated payment obligations are, in Moody’s view, direct obligations of the Government of Pakistan.
Pakistan’s Ba3 local currency bond and deposit ceilings remain unchanged. The B2 foreign currency bond ceiling and the Caa1 foreign currency deposit ceiling are also unchanged. The short-term foreign currency bond and deposit ceilings remain unchanged at Not Prime.
These ceilings act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country.
Narrowing current account deficits, in combination with enhancements to the policy framework including currency flexibility, lower external vulnerability risks in Pakistan. However, foreign exchange reserve adequacy will take time to rebuild.
Moody’s expects Pakistan’s current account deficit to continue narrowing in the current and next fiscal year (ending June of each year), averaging around 2.2 percent of GDP, from more than 6 percent in fiscal 2018 (the year ending June 2018) and around 5 percent in fiscal 2019.
ISLAMABAD: Pakistan’s trade deficit has narrowed by 34.42 percent during first five months (July – November) of current fiscal year owing to improvement in exports, said Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce, Textile, Industry & Production and Investment, on Sunday.
In a tweet message, he said that as a result of the same policies of the government, the increasing EXPORTS are contributing to improvement in our Balance of Payments position and stabilization of the economy.
The trade deficit reduced to $9.496 billion during July – November of current fiscal year as compared with the deficit of $14.479 billion in the corresponding period of the last fiscal year.
The country’s exports registered five percent growth during the period under review. The exports grew to $9.55 billion during first five months of the current fiscal year as compared with $9.11 billion in the same period of the last fiscal year.
However, the import bill of the country sharply fell by 19.27 percent during the period. The import bill declined to $19.04 billion during July – November of the current fiscal year as compared with $23.59 billion in the corresponding period of the last fiscal year.
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the minimum support price of wheat to Rs1365 per 40 kilograms from Rs1350.
The ECC, which was chaired by Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance and Revenue, on Thursday approved the minimum support price of wheat from the previously announced Rs 1350 per 40 kg to Rs 1365 per 40 kg in view of representations from various farmers and growers’ associations as well as the Federal Cabinet and the National Assembly Special Committee on Agricultural Products which had proposed a reconsideration of the minimum support price in order to compensate the farmers in areas where the cost of wheat production had increased to Rs 1349.57 per 40 kg.
Earlier, the Ministry of National Food Security & Research briefed the ECC on the feedback received from various farmers’ associations as well as different government forums and requested for fixing the minimum support price of wheat at Rs 1400 per 40 kg.
The ECC deliberated on the proposal at length and in view of the discussion and input regarding the impact of any further increase in wheat price on food inflation and financial impact on the commodity stock operations, decided to raise the minimum support price of wheat to Rs 1365 per 40 kg.
The ECC also viewed a presentation from the Ministry of Finance on the government commodity operations which had over the years resulted in Rs 757 billion as total debt and liabilities and recommendations for reducing the debt.
The ECC also considered a proposal from the Ministry of Energy regarding tariff rationalization for power sector in the first quarter of financial year 2019-20 and a approved proposal for notifying the NEPRA approved quarterly adjustment of 15 paisa per unit after incorporating a additional charge of 11 paisa per unit for maintaining uniform tariff on all categories of consumers except lifeline and domestic consumers.
The increase coming into effect on December 01, 2019 for the next twelve-monthly billing cycle would not be applicable to nearly 20 million using up to 300 units per month, out of the total 30 million consumers while 600,000 of the remaining one million consumers would only pay 7 paisa per unit as a result of this increase.
The ECC also constituted a committee headed by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh and comprising Minister of National Food Security and Research Makhdoom Khusro Bakhtiar, Prime Minister’s Advisor on Commerce and Investment, Abdul Razak Dawood and Special Assistant to Prime Minister on Petroleum Nadeem Babar to examine the current framework of determining power tariff and make it more simple in line with the practice in mature markets.
The ECC also considered a set of proposals from the Ministry of Energy (Power Division) for risk mitigation post privatisation of National Power Parks Management Company, especially the impact on fuel basket price due to non or reduced off take of 66 per cent generation under the PPA till year 2024 and cost of diversion of Regasified Liquefied Natural Gas (RLNG) to other sectors with workable options to mitigate the risk.
The ECC discussed the proposals in details and approved them with a proviso that any other option that could be considered as part of the mitigation plan by the Power Division could also be taken into account and approved, if found suitable, by the ECC. To a proposal by the Ministry of Industries and Production, the ECC constituted an inter-ministerial committee under the chairmanship of Minister Planning, Development and Reforms and comprising Adviser to Prime Minister on Industries and Production, Special Assistant to Prime Minister on Petroleum, Secretary Finance, Secretary Industries and Production and Chairman FBR for preparation of a policy framework for promotion of steel and iron in the country through foreign direct investment.
The ECC also considered a proposal by the Ministry of Communications that all cash development loans and foreign loans, whether direct or relent, including interest accumulated thereon, received up to June 30, 2019 by the National Highway Authority be converted into government grant or the Government of Pakistan may either “write-off” the said loans while for future, all PSDP allocations including relent/direct loans, both rupee and foreign exchange component i.e. for non-commercially viable projects and for strategic/defence roads to NHA may also be provided as government grant.
The proposal also sought the CDL may be advanced only for commercially feasible projects on which Finance Division and NHA mutually agree regarding the terms and conditions of the loan and its repayment or these viable projects may be undertaken by NHA in PPP/BOT mode of financing.
The ECC discussed the proposals and in view of input from the members constituted a committee comprising Minister for Planning, Development and Reforms, Secretary Finance, Secretary Communications, Secretary Economic Affairs Division and Deputy Chairman Planning Division to examine the proposals and submit their recommendations to the ECC.
The ECC also took up a proposal from the Ministry of Industries and Production for a technical supplementary grant of Rs 6 billion to the Utility Stores Corporation (USC) for subsidy and procurement of essential commodities, including flour, ghee/oil, rice, sugar and pulses, to be sold at a fair price to the poor segment of the society.
The ECC discussed the issue in detail and in view of input from the members, asked the Utility Stores Corporation to prepare within the next few days a practical and comprehensive mechanism involving use of information technology to ensure the disbursement of specific food items to the poorest of the poor.
The ECC also constituted a committee comprising Adviser to Prime Minister on Industries and Production, Governor State Bank of Pakistan, Benazir Income Support Programme Chairperson and representatives from NADRA and PPRA to advise and assist the USC to firm up their proposals and present them to ECC.
KARACHI: The liquid foreign exchange of the country increased by $115 million by the week ended November 22, 2019, the State Bank of Pakistan (SBP) said on Thursday.
The total foreign exchange reserves increased by $115 million to $15.577 billion by week ended November 22, 2019 as compared with $15.462 billion a week ago.
The foreign exchange reserves held by the central bank increased by $240 million to $8.682 billion by week ended under review as compared with $8.442 billion a week ago.
The foreign exchange reserves held by commercial banks fell by $125 million to $6.895 billion by week ended November 22, 2019 as compared with $7.020 billion a week ago.