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  • International rating agencies visit Pakistan for annual exercise

    International rating agencies visit Pakistan for annual exercise

    ISLAMABAD: International rating agencies Moody’s and Fitch have visited Pakistan for annual credit rating exercise, said a statement issued by ministry of finance on Friday.

    Details of the visit and the last five-year rating assigned to Pakistan by these two rating agencies is contained in the write-up below:

    Recent interaction of the Ministry of Finance with International Credit Rating Agencies. As part of their animal credit rating exercise, Moody’s and Fitch recently visited Islamabad and held detailed discussions with the Ministry of Finance.

    The Government of Pakistan has been maintaining relations with Moody’s since 1994 and with Fitch since 2015 for sovereign as well as Eurobonds and international Sukuk specific rating advice.

    The sovereign credit rating assigned to Pakistan by these two rating agencies in the last five years is:

    Moody’s (Rating / Outlook) Fitch (Rating / Outlook) 2015-16 B3 / Stable B/Stable 2016-17 B3 / Stable B/Stable 2017-18 B3 / Negative B/Negative 2018-19 B3 / Negative B-/Stable 2019-2020 Rating exercise ongoing Rating exercise ongoing While conducting their rating reviews, these rating agencies conduct an indepth analysis of a country’s (i) macroeconomic situation and outlook (ii) competitiveness and reforms agenda (iii) fiscal and revenue developments (iv) debt sustainability (v) monetary regime and foreign exchange reserves positions, and vi) political climate and the law and order situation.

  • Foreign exchange reserves decline by $40 million

    Foreign exchange reserves decline by $40 million

    KARACHI: Pakistan’s liquid foreign exchange reserves have declined by $40 million to $15.462 billion by week ended November 15, 2019 as compared with $15.502 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by SBP, however, increased by $45 million to $8.442 billion by week ended November 15, 2019 as compared with $8.397 billion a week ago.

    The reserves held by commercial banks fell by $85 million to $7.020 billion as compared with $7.105 billion a week ago.

  • Share of payment to Chinese imports increases 21.42pc

    Share of payment to Chinese imports increases 21.42pc

    KARACHI: The share of import payment to China has increased to 21.42 percent during first four months (July – October) 2019/2020 as compared with share of 18 percent in the corresponding period of the last fiscal year.

    The total payment for import from China was at $3.14 billion during first four months of current fiscal year out of Pakistan’s total import bill of $14.65 billion for the same period, according to statistics released by State Bank of Pakistan.

    The total payment for import from China was at $3.45 billion in first four months of fiscal year 2018/2019 when total import bill for the period was $19.02 billion.

    The payment for total import bill has registered 23 percent decline to $14.656 billion during first four months of current fiscal year as compared with $19.016 billion in the corresponding months of the last fiscal year.

    The payment for import from China, however, also declined but by 9.14 percent to $3.14 billion during first four months of current fiscal year as compared with $3.45 billion in the same period of the last fiscal year.

    China is remained the largest exporting country for Pakistani markets during the first four months of current fiscal year.

    The United Arab Emirates (UAE) is the second largest exporting country for Pakistani markets during the period under review.

    However, the import payment to UAE fell sharply by 30 percent and stood at $2.44 billion during first four months of current fiscal year as compared with $3.5 billion in the corresponding period of the last fiscal year.

    The share of import payment to UAE in total import payment of Pakistan also fell to 16.68 percent during July – October 2019/2020 as compared with share of 18.44 percent in total import bill in July – October 2018/2019.

    Pakistan has taken several measures during the past couple of years to discourage imports of luxury and non-essential items.

    The decline in import bill during the first four months can be attributed to those measures taken by the government.

  • Cabinet approves gradual reduction in regulatory duty

    Cabinet approves gradual reduction in regulatory duty

    ISLAMABAD: The Federal Cabinet has approved gradual reduction in regulatory duty and additional customs duty under first-ever National Tariff Policy (NTP).

    The federal cabinet, in its meeting chaired by the Prime Minister held on Tuesday November 19, 2019, approved the first-ever National Tariff Policy (NTP).

    The policy guidelines contained in the NTP, as approved by the Cabinet, provide that the tariff slabs will be simplified based on the principle of cascading; tariffs on raw materials, intermediate and capital goods will be gradually reduced; the additional customs duty and regulatory duties will be gradually reduced; the difference in the rates of tariff for the commercial importers and industrial users of raw materials, intermediate and capital goods will be eliminated to provide a level-playing field to the SMEs through competitive access to essential raw materials; the nascent industry will be provided time-bound protection, which will cover the payback period.

    The policy, developed by the commerce division after extensive consultations with the stakeholders, marks a milestone in the national economic policy paradigm by recognizing the importance of employing import tariffs for industrial development and export growth.

    The prime minister, in his remarks during the cabinet meeting, said that the import tariffs have been traditionally employed as a revenue generation tool, which has increased reliance on import tariffs for revenue collection. In accordance with the reform agenda of the government, the economic policy paradigm is now being realigned to leverage tariffs for industrial development.

    The National Tariff Policy aims at removing the anomalies in the tariff structure and making it a reflection of trade policy priorities and enhancement of competitiveness through duty-free access to imported raw materials and promotion of investment into efficient industries through a predictable tariff structure, decided through an institutional mechanism.

    The NTP is based on the principles of (i) employing tariffs as an instrument of trade policy rather than revenue generation, (ii) maintaining vertical consistency through cascading tariff structures (increasing tariff with stages of processing of a product), (iii) providing time-bound ‘strategic protection’ to the domestic industry during the infancy phase, and (iv) promoting competitive import substitution through time-bound protection, which will be phased out to make the industry eventually competitive for export-oriented production.

    The policy will be implemented through a Tariff Policy Board (TPB) chaired by the Commerce Minister/Advisor, with Minister for Industries & Production, Secretary Finance, Secretary Revenue, Chairman FBR, Secretary Commerce, Secretary Board of Investment, and Chairman NTC as its members.

    A Tariff Policy Centre shall be created in the Ministry of Commerce, which will serve as the Secretariat of the TPB.

    Abdul Razak Dawood, Commerce Advisor, stated that the NTP marks a watershed in the country’s economic policy making since it would energize export growth, lead to rapid industrialization, and import substitution through predictability in tariff framework.

  • Foreign investment increases to $1.1 billion owing to debt securities attraction

    Foreign investment increases to $1.1 billion owing to debt securities attraction

    KARACHI: Pakistan’s total inflow of foreign investment has increased to $1.1 billion during first four months (July – October) 2019/2020 as compared with outflow of $77.5 million in the corresponding months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The inflows can be attributed to attractive avenue in the debt securities for foreign participants.

    The total portfolio investment has been recorded at $436.7 million during first four months of the current fiscal year as compared to a negligible amount in the same period of the last fiscal year.

    The total inflow of foreign private investment was at $665.7 million during first four months of the current fiscal year as compared with $77.6 million outflow in the corresponding months of the last fiscal year.

    The foreign direct investment also grew by 238.7 percent to $650 million during period under review as compared with $192 million in the same period of the last fiscal year.

    The inflow of portfolio investment in capital market was recorded at $15.6 million as compared with outflow of $269.5 million.

  • Pakistan’s foreign exchange reserves fall to $15.5 billion

    Pakistan’s foreign exchange reserves fall to $15.5 billion

    KARACHI: Pakistan’s liquid foreign exchange reserves fell by $16 million to $15.502 billion by week ended November 08, 2019 as compared with $15.518 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by State Bank increased by $40 million to $8.397 billion by week ended on November 08, 2019 as compared with $8.357 billion a week ago.

    However, the reserves held by commercial banks fell by $56 million to $7.104 billion as compared with $7.16 billion a week ago.

  • Pakistan’s trade deficit narrows by 33.52 percent in July – October

    Pakistan’s trade deficit narrows by 33.52 percent in July – October

    ISLAMABAD: Pakistan’s trade deficit has narrowed by 33.52 percent during first four months (July – October) of current fiscal year owing to improving exports.

    According to data released by Pakistan Bureau of Statistics (PBS) on Thursday, the trade deficit reduced to $7.77 billion during July – October of current fiscal year as compared with the deficit of 11.7 billion in the corresponding period of the last fiscal year.

    The country’s exports registered four percent growth during the period under review. The exports grew to $7.54 billion during first four months of the current fiscal year as compared with $7.27 billion in the same period of the last fiscal year.

    However, the import bill of the country sharply fell by 19.21 percent during the period. The import bill declined to $15.32 billion during July – October of the current fiscal year as compared with $18.96 billion in the corresponding period of the last fiscal year.

  • Overseas Pakistanis send $7.48 billion in four months

    Overseas Pakistanis send $7.48 billion in four months

    KARACHI: Overseas Pakistanis have remitted $7.48 billion during first four months of current fiscal year, which is 1.8 percent lower when compared with $7.62 billion in the corresponding period of the last fiscal year.

    During October 2019, the inflow of workers remittances amounted to US$ 2,000.80 million, which is 14.46 percent higher than September 2019 and 2.88 percent lower than October 2018.

    The country wise details for the month of October 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to US$ 468.18 million, US$ 398.96 million, US$ 322.38 million, US$ 328.69 million, US$ 191.77 million and US$ 60.94 million respectively compared with the inflow of US$ 494.53 million, US$ 419.41 million, US$ 325.19 million, US$ 322.29 million, US$ 200.87 million and US$ 57.42 million respectively in October 2018. Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during October 2019 amounted to US$ 229.88 million together as against US$ 240.57 million received in October 2018.

  • Pakistan’s foreign exchange reserves increase to $15.518 billion

    Pakistan’s foreign exchange reserves increase to $15.518 billion

    KARACHI: The liquid foreign exchange reserves of Pakistan have increased by $428 million to $15.518 billion by week ended November 01, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $15.089 billion by week ended October 25, 2019.

    The reserves held by SBP increased by $443 million to $8.357 billion by week ended November 01, 2019 as compared with $7.914 billion in the preceding week.

    The reserves held by commercial banks decreased by $15 million to $7.16 billion by week ended November 01, 2019 as compared with $7.715 billion a week ago.