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  • SECP notifies regulations to promote electronic trading of commodities

    SECP notifies regulations to promote electronic trading of commodities

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has notified regulations to promote warehouse receipt financing and electronic trading of agricultural commodities.

    The SECP on Friday issued Collateral Management Companies (CMC) Regulations, 2019 under the Companies Act, 2017 to promote warehouse receipt financing and electronic trading of agricultural commodities.

    Under these Regulations, any public limited company with a minimum paid-up capital of Rs. 200 million will be eligible for seeking permission of SECP to register as a CMC.

    A CMC, through its accredited warehouses, will provide storage and preservation services for a range of agricultural commodities.

    In doing so, a CMC, through its electronic warehouse receipt system, will issue warehouse receipts which can be used by farmers/depositors of agricultural commodity for financing from financial institutions and trading of electronic warehouse receipt at the exchange.

    The CMC will play an effective role in the agriculture value chain by ensuring security of collateral stored in the accredited warehouse through its robust oversight mechanism.

    Earlier, the SECP through a notification dated July 2, 2019 issued draft regulations for public consultation.

    During this consultative process, comprehensive deliberations were carried out with key stakeholders including the State Bank of Pakistan, Pakistan Banks Association, Pakistan Agricultural Coalition, Pakistan Mercantile Association and commercial banks.

    After incorporating comments of the stakeholders, the regulations have been notified.

    Salient amendments, after public consultation, include reduction in the registration fee of a CMC, removal of requirement for periodic accreditation, easing of documentary requirements for sponsors of a CMC, allowing electronic warehouse receipt to be traded on the exchange, and according enforcement powers to the CMC for cancelling accreditation of warehouse upon occurrence of certain events.

    SECP envisages that these amendments would help support its overall strategic objective of promoting ease of doing business.

    Promulgation of these regulations, in addition to providing a well-designed collateral management system, is envisaged to complement the agenda of the Government for uplifting agriculture sector which entails improved access to finance for farmers, improved farmer profitability and reduced risk for creditors through secure collateral.

  • Headline inflation increases by 10.3pc in July 2019

    Headline inflation increases by 10.3pc in July 2019

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has increased by 10.3 percent on year-on-year basis in July, 2019, said Pakistan Bureau of Statistics (PBS) on Thursday.

    The inflation has been increased as compared to an increase of 8.9 percent in the previous month and 5.8 percent in July 2018.

    On month-on-month basis, it increased by 2.3 percent in July 2019 as compared to an increase of 0.4 percent in the previous month and an increase of 0.9 percent in corresponding month i.e. July 2018.

    Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 7.8 percent on (YoY) basis in July 2019 as compared to an increase of 7.2 percent in the previous month and 7.6 percent in July 2018. On (MoM) basis, it in-creased by 1.7 percent in July 2019 as compared to an increase of 0.3 percent in previous month, and an increase of 1.2 percent in corresponding month of last year i.e. July 2018.

    Core inflation, measured by 20 percent weighted trimmed mean CPI (Core Trimmed) increased by 8.0 percent on (YoY) basis in July 2019 as compared to 7.3 percent in the previous month and by 5.9 percent in July 2018.

    On (MoM) basis, it increased by 1.7 percent in July 2019 as compared to an increase of 0.4 percent in the previous month and an increase of 0.9 percent in cor-responding month of last year i.e. July 2018.

    Sensitive Price Indicator (SPI) based inflation on YoY basis increased by 12.2 percent in July 2019 as compared to an increase of 10.6 percent a month earlier and an increase of 3.6 percent in July 2018.

    On MoM basis, it increased by 2.6 percent as compared to an increase of 1.6 percent in the previous month and an increase of 1.2 percent in corresponding month of last year i.e. July 2018.

    Wholesale Price Index (WPI0 inflation on YoY basis increased by 13.5 percent in July 2019 as compared to an increase of 12.7 percent a month earlier and an increase of 10.5 percent in July 2018.

    WPI inflation on MoM basis increased by 3.1 percent in July 2019 as compared to an increase of 0.3 percent a month earlier and an increase of 2.4 percent in corresponding month of last year i.e. July 2018.

  • Foreign exchange reserves increase to $15.062 billion

    Foreign exchange reserves increase to $15.062 billion

    The State Bank of Pakistan (SBP) has reported a significant boost in the country’s liquid foreign exchange reserves, which surged by $200 million to reach $15.062 billion as of the week ending July 26, 2024. This increase marks a notable improvement from the $14.862 billion recorded the previous week.

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  • ECC approves 10 percent regulatory duty on cotton import

    ECC approves 10 percent regulatory duty on cotton import

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved imposition of 10 percent regulatory duty on import of cotton.

    (more…)
  • Foreign exchange reserves down by $387 million to $14.486 billion

    Foreign exchange reserves down by $387 million to $14.486 billion

    KARACHI: The liquid foreign exchange reserves of the country have declined by $387 million to $14.486 billion by week ended July 19, 2019 as compared with $15.249 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The reserves held by the central bank fell by$389 million to $7.612 billion by week ended July 19, 2019 as compared with $8.001 billion a week ago. The central bank said that its reserves were reduced due to external debt servicing and other official payments.

    The reserves held by commercial banks were flat at $7.250 billion as compared with $7.248 billion.

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  • Imran Khan discusses economic reforms with IMF chief

    Imran Khan discusses economic reforms with IMF chief

    WASHINGTON: Prime Minister Imran Khan on Sunday met David Lipton, Acting Managing Director of International Monetary Fund to discuss economic reform program.

    David Lipton, Acting Managing Director of the International Monetary Fund (IMF), issued the following statement today, following his meeting with the Prime Minister of Pakistan, Imran Khan:

    “I was pleased to meet Prime Minister Khan of Pakistan today in Washington, DC. We discussed recent economic developments and the implementation of the authority’s economic reform program supported by the IMF.

    “Their program aims to stabilize the economy, strengthen institutions, and thereby put Pakistan on a path of sustainable and balanced growth.

    “I highlighted the need to mobilize domestic tax revenue now and on into the future to provide reliably for needed social and development spending, while placing debt on a firm downward trend.

    “The IMF, together with other international partners, is working closely with the government of Pakistan to support the implementation of the authorities’ economic reform program.”

  • Textile exports decline by 15pc in June on budgetary measures

    Textile exports decline by 15pc in June on budgetary measures

    KARACHI: Pakistan’s textile exports fell by 15 percent in June 2019 to $1.01 billion as compared with $1.19 billion in the same month of the last year, according to export data released by Pakistan Bureau of Statistics (PBS) on Friday.

    The exports of June 2019 has also exhibited 14.55 percent decline when compared with $1.18 billion in May 2019.

    Analysts said that uncertainty in exchange rate and budgetary measures have negatively impacted the exports in the month of June 2019.

    They said that the currency fluctuated massively during past two months, which increased the cost of imported raw material. Further budgetary measures including elimination of sales tax zero-rating for five export sectors also caused in export decline.

    The overall exports of textile products fell by 1.42 percent to $13.33 billion during fiscal year 2018/2019 as compared with $13.52 billion in the preceding fiscal year.

    The experts said that despite several incentives given by the government to this particular sector the exports were remained stagnant. They said that the government in terms of incentives had granted rebate and credit on duty and taxes.

    The exports of knitwear and readymade garments have supported the overall textile exports. The export of knitwear grew by 7 percent to $2.89 billion during fiscal year 2018/2019 as compared with $2.711 billion in the preceding fiscal year.

    Similarly, the export of readymade garments exhibited growth of three percent to $2.65 billion in the fiscal year under review as compared with $2.577 billion in the fiscal year 2017/2018.

    The export of raw cotton and cotton year witnessed decline of 65 percent and 18 percent during the comparative fiscal years.

    However, export of bead wear was remained flat at $2.262 billion in fiscal year 2018/2019 as compared with $2.261 billion in the preceding fiscal year.

    The State Bank of Pakistan (SBP) in its third quarterly report on Pakistan Economy said that the stagnation in overall textile exports stemmed from a slowdown in export growth (in value terms) of readymade garments and knitwear items, and Year on Year (YoY) declines in cotton fabric and yarn exports.

    Except for yarn, export values of all these major products suffered from a drop in unit prices, as quantum exports grew appreciably. The drop in dollar-based unit prices was mainly owed to exchange rate adjustments, as exports rose significantly in Pak Rupee terms, the SBP said.

    In rupee term the textile exports registered 22 percent growth during 2018/2019 as compared with preceding fiscal year.

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  • Foreign exchange reserves increase to $15.249 billion

    Foreign exchange reserves increase to $15.249 billion

    KARACHI: The total liquid foreign exchange reserves of the country increased by $990 million to $15.249 billion by week ended July 12, 2019 as compared with $14.259 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The official reserves of the SBP increased by $918 million to $8 billion during the week under review as compared with $7.083 billion in the preceding week. The central bank said that the official reserves were increased due to inflows of $991.4 million from International Monetary Fund (IMF) as first tranche of $6 billion extended fund facility for Pakistan.

    The reserves held by commercial banks also increased by $73 million to $7.248 billion by week under review as compared with $7.175 billion in the preceding week.

  • Fiscal deficit deteriorates on slowdown in tax collection: SBP

    Fiscal deficit deteriorates on slowdown in tax collection: SBP

    KARACHI: State Bank of Pakistan (SBP) on Monday said that the fiscal deficit was ballooned owing to slowdown in tax revenue collection and fall in non-tax revenue.

    In its third quarterly report on Pakistan Economy, the SBP said that the fiscal deficit deteriorated further, as a steep fall in non-tax revenues and a slowdown in tax revenue led the overall revenue collection to stagnate at last year’s level. On the other hand, expenditure increased sharply during July-March FY19, specifically the current expenditure that more than offset the decline in the development expenditure.

    While Pakistan’s economy moved along the stabilization phase led by demand management policies, vulnerabilities in the external and fiscal sectors persisted during Jul-Mar FY19.

    This implies that the current stabilization agenda needs to be reinforced with deep rooted structural reforms.

    The pace of economic growth slowed down considerably during FY19, mainly in response to policy measures taken to curb the twin deficits.

    These measures affected the performance of the industrial sector and dampened manufacturing activities in the country.

    Meanwhile, water- and weather-related concerns, in tandem with the higher cost of major inputs, took a toll on crop production. The weak showing by the commodity-producing sectors also constrained the output of the services sector.

    According to the report, inflation stubbornly kept an upward trajectory. Despite several rounds of policy rate hike since January 2018, the average CPI inflation during Jul-Mar FY19 exceeded the full year target.

    Although demand-pull pressures lessened in intensity towards the end of FY19, the Non-Food Non-Energy component continued to climb due to second round impact of exchange rate deprecation and increase in energy prices.

    On the external front, the current account deficit (CAD) declined on the back of lower import payments for both goods and services, and a decent growth in workers’ remittances.

    However, given the elevated level of CAD and insufficient foreign investments to fill the financing gap, the country had to resort to bilateral and commercial sources for external financing.
    The report features a special section on power tariffs in Pakistan. The analysis explains the process of power tariff determination in the country and assesses why tariffs have not softened despite the decline in fuel cost. It suggests that capacity payments constitute the bulk of power tariffs in Pakistan, and a sharp increase in these payments in recent years has completely offset gains from declining fuel cost.

    The report also contains another special section on the outlook of food security in Pakistan. The analysis emphasizes the related challenges that the country may face going forward, such as a high population growth and unfavorable water and climatic conditions, unless remedial measures are taken urgently.