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  • Daraz highlights problem of cross-border payments

    Daraz highlights problem of cross-border payments

    Daraz, a leading online marketplace operating in Pakistan, has brought to the forefront significant issues related to cross-border payments. During a high-level meeting with Finance Minister Ishaq Dar on Wednesday, Ehsan Saya, Managing Director of Daraz, along with a delegation, discussed these operational challenges in detail.

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  • Finance Division rebuts economic emergency report

    Finance Division rebuts economic emergency report

    ISLAMABAD: Finance Division on Tuesday strongly rebutted the reports regarding proposals under consideration for imposing economic emergency.

    According to a statement issued by the finance division, a false message on supposed economic emergency proposals has been circulating on the social media in recent days.

    READ MORE: Pakistan purchases 450,000 metric tons wheat from Russia

    The finance division not only strongly rebuts the assertions made in the said message and but also categorically denies it and that there is no planning to impose economic emergency.

    The message is unfortunately aimed at creating uncertainty about the economic situation in the country and can only spread by those who do not want to see Pakistan prosper.

    Creation and spread of such false messages is against national interest in these times of economic hardship. A mere reading of the nine points mentioned in the message indicates how far-fetched those suggestions are.

    READ MORE: Saudi Arabia extends term of $3 billion deposit for Pakistan

    It is also quite inappropriate to equate Pakistan with Sri Lanka, given inherent strength and diversity in Pakistan’s economy.

    The present difficult economic situation is mainly the result of exogenous factors like commodity super-cycle, Russia-Ukraine war, global recession, trade headwinds, Fed’s increase in policy rates and devastation wreaked by unprecedented floods.

    The government has been making utmost efforts to minimize the impact of such external factors, even when faced with the economic consequences of unprecedented floods and having to meet IMF conditionalities.

    READ MORE: Pakistan exports plunge 18.34pc in November 2021

    The authorities are committed to completing the IMF program while meeting all external debt repayments on time. In this challenging economic situation, the government has put in place a number of austerity measures with the approval of the Federal Cabinet.

    Such measures are in public knowledge and are aimed at eliminating non-essential expenditures. Similarly, the Government has been deliberating energy conservation mainly aimed at reducing the import bill.

    Such deliberations will continue in the Cabinet and all decisions will be taken in consultation with all stakeholders and in the best national interest. With the efforts of the current government, the IMF program has come back on track and negotiations leading to 9th Review are now at an advanced stage. Government’s recent efforts have resulted, amongst others, in lower current account deficits in recent months and achievement of FBR revenue targets.

    READ MORE: SBP foreign exchange reserves fall to $7.5 billion

    Easing up of pressure on external account is also foreseen in the near future. While there remains the need to make structural adjustments in the mid-term, the economic situation of the country is now moving towards stability.

    Finance Division urges the people of Pakistan to contribute towards economic betterment and stability and not to pay heed to malicious rumors mongering which is against the national interest of Pakistan.

  • Pakistan purchases 450,000 metric tons wheat from Russia

    Pakistan purchases 450,000 metric tons wheat from Russia

    ISLAMABAD: Pakistan is purchasing of 450,000 metric tons wheat from Russia as country’s economic coordination committee approved a bid of a Russian company.

    The Economic Coordination Committee (ECC) of the Cabinet met on Monday which was presided over by Finance Minister Ishaq Dar.

    READ MORE: Saudi Arabia extends term of $3 billion deposit for Pakistan

    Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Syed Murtaza Mahmud, Shahid Khaqan Abbasi MNA/Ex-PM, Minister of State for Finance and Revenue Dr. Ayesha Ghous Pasha, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, SAPM on Government Effectiveness Dr. Muhammad Jehanzeb Khan, Federal Secretaries and other senior officers attended the meeting in person while Federal Minister for Commerce Syed Naveed Qamar, Minister of State for Petroleum Musadik Masood Malik, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal and Governor SBP, MD PASSCO joined the meeting through Zoom.

    READ MORE: Pakistan exports plunge 18.34pc in November 2021

    Ministry of National Food Security and Research submitted a summary on Award of 7th International Wheat Tender 2022 opened on November 30, 2022.

    Keeping in view results of 7th International tender and G2G offer, the ECC approved the lowest bid from M/s Cereal Crop Trading LLC at $ 372/MT for supply of 130,000 MT at Karachi ports for the shipment period from 16th December, 2022 8th February, 2023.

    READ MORE: SBP foreign exchange reserves fall to $7.5 billion

    The ECC also granted approval of the offer of M/s Prodintorg , Russia on Government to Government (G2G) basis at $ 372 /MT for supply of 450,000 MT at Gwadar Port for shipment period from 1st February, 2023 to 31st March, 2023.

    It was decided that any additional cost on inland transportation from Gwadar Port will be borne by PASSCO to be recovered from provinces at the time of release of wheat stock.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    The ECC also approved proposal of Finance Ministry to change the title of the revolving fund account for CPEC Independent Power Producers from “Pakistan Energy Revolving Fund” to “Pakistan Energy Revolving Account”.

  • Saudi Arabia extends term of $3 billion deposit for Pakistan

    Saudi Arabia extends term of $3 billion deposit for Pakistan

    KARACHI: Saudi Arabia on has extended the term of $3 billion deposit with the State Bank of Pakistan (SBP), said a statement issued on Friday.

    The central bank said that the Saudi Fund for Development (SFD) extended the term for the deposit provided by the Kingdom of Saudi Arabia in the amount of 3 billion dollars to the SBP.

    The extension of the term of the deposit is a continuation of the support provided by the government of the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, as the deposit aimed to shore up the foreign currency reserves in the bank and help Pakistan in facing the economic repercussions of the COVID-19 pandemic; it, furthermore, contributed to meet external sector challenges and achieve sustainable economic growth for the country.

    It is worth noting that the $3 billion-deposit agreement was signed through the Saudi Fund for Development (SFD) with the State Bank of Pakistan in November of last year 2021, after the issuance of the royal directives that reflect the continuation of the close relationship between the two countries.

  • Pakistan exports plunge 18.34pc in November 2021

    Pakistan exports plunge 18.34pc in November 2021

    ISLAMABAD: Pakistan exports have registered 18.34 per cent decline Year on Year (YoY) in November 2022 owing to import restrictions and slowdown in global demand.

    Data released by Pakistan Bureau of Statistics (PBS) on Thursday revealed that exports fell to $2.37 billion in November 2022 when compared with $2.9 billion in the corresponding month last year.

    READ MORE: Pakistan’s import restrictions help narrowing trade deficit by 27%

    Imports of the country recorded 33.60 per cent decline to $5.245 billion in November 2022 when compared with $7.9 billion in the same month of the last year.

    This resulted contraction in trade deficit of 42.46 per cent to the deficit of $2.876 billion in November 2022 as against $5 billion in the same month of the last year.

    READ MORE: Pakistan import bill falls by 12.72% in 1QFY23

    The decline in exports can be attributed to the restrictions imposed on imports which hampered industrial and export activities. Furthermore, global slowdown also added to export fall.

    Meanwhile, exports recorded a nominal decline of 0.63 per cent to $2.37 billion in November 2022 when compared with previous month of September 2022 at $2.38 billion.

    However, imports recorded an increase of 11.34 per cent to $5.24 billion on Month on Month (MoM) in November 2022 when compared with $4.71 billion in the previous month.

    READ MORE: Pakistan trade deficit narrows by 17% in 2MFY23

    This brings the widening of trade deficit by 23.59 per cent to $2.876 billion in November 2022 when compared with the deficit of $2.33 billion in September 2022.

    Overall trade deficit during first five months (July – November) 2022/2023 contracted by 30.14 per cent to $14.41 billion when compared with the deficit of $20.62 billion in the corresponding months of the last fiscal year.

    READ MORE: Pakistan’s trade deficit narrows by 18% in July 2022

    Exports of the country recorded 3.48 per cent decline to $11.93 billion during first five months of the current fiscal year as against $12.36 billion in the same months of the last year.

    Whereas, import bill fell by 20.15 per cent to $26.34 billion during the period of July – October of fiscal year 2022-2023 as against $32.98 billion in the same period of the last fiscal year.

  • SBP foreign exchange reserves fall to $7.5 billion

    SBP foreign exchange reserves fall to $7.5 billion

    KARACHI: Official foreign exchange reserves of State Bank of Pakistan (SBP) have declined by $327 million by week ended November 25, 2022 leaving import cover of only one and half months.

    The official foreign exchange reserves of the SBP fell by $327 million to $7.499 billion by week ended November 25, 2022 as compared with $7.826 billion a week ago.

    READ MORE: Pakistan official reserves fall to around 1 ½ months import coverage

    The import bill of the country was at $4.71 billion in October 2022, according to Pakistan Bureau of Statistics (PBS). According to the month import bill the existing foreign exchange reserves of the SBP have reduced to cover only 1.56 months import payment.

    The central bank attributed the decline in official reserves to repayment against external debt.

    READ MORE: Pakistan forex reserves inch up to $13.796 billion

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.647 billion.

    It is pertinent to mention that the SBP’s reserves witnessed sizeable increase after inflows from the Asian Development Bank (ADB) $1.5 billion on October 26, 2022.

    READ MORE: Pakistan FX reserves slip sharply by $958 mn on external payments

    The total reserves of the country fell by $267 million to $13.378 billion by week ended November 25, 2022 as compared with $13.645 billion a week ago.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.850 billion.

    READ MORE: SBP’s weekly forex reserves dip by $157 million to $7.44 billion

    The foreign exchange reserves held by commercial banks however, recorded an increase of $60 million to $5.879 billion by week ended November 25, 2022 as compared with $5.819 billion a week ago.

  • Pakistan’s inflation increases by 23.8pc in November 2022

    Pakistan’s inflation increases by 23.8pc in November 2022

    Pakistan’s headline inflation based on Consumer Price Index (CPI) increased by 23.8 per cent in November 2022, according to official data revealed on Thursday.

    CPI inflation General, increased to 23.8 per cent on year-on-year basis in November 2022 as compared to an increase of 26.6 per cent in the previous month and 11.5 per cent in November 2021. On month-on-month basis, it increased to 0.8 per cent in November 2022 as compared to an increase of 4.7 per cent in the previous month and an increase of 3.0 per cent in November 2021.

    READ MORE: Headline inflation surges by 26.6% in October 2022

    CPI inflation Urban, increased to 21.6 per cent on year-on-year basis in November 2022 as compared to an increase of 24.6 per cent in the previous month and 12.0 per cent in November 2021. On month-on-month basis, it increased to 0.4 per cent in November 2022 as compared to an increase of 4.5 per cent in the previous month and an increase of 2.9 per cent in November 2021.

    READ MORE: Pakistan’s headline inflation rises 23.2% in September 2022

    CPI inflation Rural, increased to 27.2 per cent on year-on-year basis in November 2022 as compared to an increase of 29.5 per cent in the previous month and 10.9 per cent in November 2021. On month-on-month basis, it increased to 1.3 per cent in November 2022 as compared to an increase of 5.0 per cent in the previous month and an increase of 3.1 per cent in November 2021.

    READ MORE: Pakistan’s headline inflation hits 47-year high in August 2022

    Sensitive Price Indicator (SPI) inflation on YoY increased to 27.1 per cent in November 2022 as compared to an increase of 24.0 per cent a month earlier and an increase of 18.1 per cent in November 2021. On MoM basis, it increased by 6.1 per cent in November 2022 as compared to a decrease of 1.5 per cent a month earlier and an increase of 3.6 per cent in November 2021.

    READ MORE: Pakistan inflation hits 14-year high at 25% in July

    Wholesale Price Index (WPI) inflation on YoY basis increased to 27.7 per cent in November 2022 as compared to an increase of 32.6 per cent a month earlier and an increase of 27.0 per cent in November 2021. On MoM basis, it decreased by 0.02 per cent in November 2022 as compared to a decrease of 0.5 per cent a month earlier and an increase of 3.8 per cent in corresponding month i.e. November 2021.

  • Pakistan slaps 5pc regulatory duty on yarn import

    Pakistan slaps 5pc regulatory duty on yarn import

    ISLAMABAD: Pakistan on Tuesday slapped regulatory duty at 5 per cent on the import of filament yarns.

    The 5 per cent regulatory duty would be imposed on filament Yarns falling in Pakistan Customs Tariff (PCT) of 5402.3300, 5402.4600, 5402.4700, 5402.5200 and 5402.6200.

    The decision has been taken at a meeting of Economic Coordination Committee of the Cabinet (ECC) which was presided over by Finance Minister Ishaq Dar.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    Ministry of Commerce submitted a summary on Individual Tariff Rationalization proposal from different sectors for review of Regulatory Duties (RDs). The ECC after discussion approved the proposal to reduce RD on Disodium Carbonate (PCT – 2836.2000) from current rate of 20 per cent to 10 per cent and imposed RD at rate of 5 per cent on filament Yarns (PCT 5402.3300, 5402.4600, 5402.4700, 5402.5200 and 5402.6200).

    Federal Minister for National Food Security and Research Tariq Bashir Cheema, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Syed Murtaza Mahmud, Federal Minister for Information and Broadcasting Ms. Marriyum Aurangzeb, Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, Shahid Khaqan Abbasi MNA/Ex-PM, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, Federal Secretaries, Chairman Federal Board of Revenue (FBR) and other senior officers attended the meeting.

    READ MORE: ECC approves raising petroleum levy to Rs50 per liter on RON 95

    Finance Division submitted a summary on launch of Credit Guarantee Scheme under Credit Guarantee Trust Fund through Second Supplemental Trust Deed.

    It was presented that Pakistan Mortgage Refinance Company Limited (PMRC) has been setup as a joint initiative of the government of Pakistan and Commercial Banks/Development Finance Institutions (DFIs) to provide medium and long term funding to primary mortgage lenders by raising from the capital debt market at cheaper rates.

    PMRC being the trustee launched a scheme titled, Credit Guarantee Trust Scheme under the First Supplemental Trust Deed.

    To expand the provision of risk cover to FIs against financing in housing sector, the WB approved an additional credit line to the government of Pakistan for housing finance project which may be passed on to Credit Guarantee Trust Fund.

    READ MORE: Petroleum sales decrease by 22% in four months of 2022-2023

    In view of above, the ECC allowed to launch a new scheme titled, Credit Guarantee Trust Scheme for low income housing through Second Supplemental Trust Deed with an amount of $85 million to be obtained from the World Bank (WB) to provide risk cover to financing institutions against their financing in housing sector.

    Ministry of National Food Security and Research submitted a summary on fixation and notification of Minimum Indicative Prices of Tobacco Crop 2023. After detailed deliberation, the ECC approved minimum indicative prices for various types of tobacco for different areas for 2023 tobacco crop as under: S. No Types of Tobacco Minimum Indicative prices for 2023 Crop (Rs. Per Kg) 1. Flue Cured Virginia (FCV) i. Plain Area ii. Sub-mountainous Area 310 351 2. Dark Air-Cured Tobbaco (DAC) 190 3 White Patta 146 4. Burley 223 5. Naswar/ Snuff/Hookah and other Rustica tobacco and its products 146 6.

    Sun Cured Virginia (SCV) 200 Power Division submitted a summary on Uniform tariff for K-electric. It was submitted that KE applicable uniform variable charge is required to be modified to maintain the uniform tariff across the country with category wise increases including general supply tariff – residential, general supply tariff – commercial, industrial supply tariff, bulk supply tariff, agriculture tariff, and public lighting with recovery period of four months.

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    It was also shared such adjustment shall be applicable on the consumption from October 2022 to January 2023 to be recovered from consumers in December 2022 to March 2023, respectively.

    The ECC after deliberation approved this proposal. Power Division submitted another summary on settlement of payables to Government Owned Power Plants at par with IPPS. The ECC approved Technical Supplementary Grant of Rs. 93.438 billion in three tranches of Rs. 31.146 billion each.

    The ECC discussed summary submitted by Ministry of National Food Security and Research submitted on Kissan Package-2022 and approved base tariff for electric tube wells at Rs. 13/kWH from Rs. 16.60/kWH, providing relief to farmers of Rs. 3.60/kWH effective from November 01, 2022 to compensate the damage caused by the floods and heavy rains.

    Ministry of Information and Broadcasting submitted a summary for allocation of budget to launch comprehensive media awareness campaign on government initiatives, programmes and projects. The ECC after detailed discussion approved Supplementary Grant of Rs. 2 billion for flood related media campaigns.

    ECC approved Rs. 15 billion in favour of Election Commission of Pakistan for Current Financial Year 2022-23. Out of Rs. 15 billion, Rs. 5 billion will be released immediately while the balance will be released in tranches on utilization of the first tranche.

    The ECC also approved Technical Supplementary Grant amounting to Rs. 162.521 million in favour of Ministry of Housing and Works in addition to approving Rs. 250 million for execution of development scheme titled “Construction of Railway underpass, Gojra, District Toba Tek Singh” and Rs. 144.210 million for execution of development schemes in District D.I. Khan.

  • Pakistan will repay foreign debt on time: Dar

    Pakistan will repay foreign debt on time: Dar

    ISLAMABAD: Finance Minister Ishaq Dar Tuesday said that the Pakistan will repay foreign debt against international bonds on time.

    The finance minister said at a meeting with a delegation of institutional investors at Finance Division.

    Ishaq Dar further asserted that present government aims at successfully completing the IMF program and shared that the government will repay the international bonds on time. Further, there was no plan to approach Paris Club.

    READ MORE: Pakistan repays $1.8 billion in November 2022: SBP

    He further asserted that present government is committed to honor all of the financial commitments made by the present as well previous government with national and international financial institutions.

    The delegation comprised of Managing Director Khurram Sheikh and Ms. Alia Moubayed from Jefferies, Mahmood Ali Shah Bukhari – CEO K-trade, Vice President Luis Assad Simon Tamborrel from Goldman Sachs Asset Management, Co-Chief Investment Officer James Edmon Craige from Stone Harbor Investment Partners, Portfolio Manager Carl Vermassen from Vontobel Asset Management.

    While SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Pasha, Special Secretary Finance and other senior officers from Finance Division also attended the meeting.

    READ MORE: State Bank stuns market with massive policy rate hike

    The delegation discussed about the economic situation and outlook of the country. The delegation held a comprehensive discussion with the Finance Minister regarding IMF program, flood related expenditure and losses, market perception and outlook, as well as external account situation.

    The Finance Minister welcomed the delegation and assured the delegation that the present government has taken all pragmatic measures to facilitate the business environment in Pakistan.

    READ MORE: SBP raises benchmark interest rate by 100 basis points to 16pc

    He shared that Pakistan is slowly but gradually moving toward economic stability and it is high time to invest in Pakistan. It was shared that reconstruction and rehabilitation phase will start in the coming months. The Finance Minister appreciated the friendly countries for their flood relief support.

    In conclusion, the delegation thanked the Finance Minister for their positive response and support.

    READ MORE: SBP keeps policy rate unchanged at 15% amid economic deceleration

  • Pakistan out of default risk: PM Shehbaz

    Pakistan out of default risk: PM Shehbaz

    ISLAMABAD: Prime Minister Muhammad Shehbaz Sharif Tuesday said Pakistan is out of default risk due to difficult decisions taken by the present government.

    The prime minister said the government was taking all possible steps to further strengthen the national economy and was striving with priority measures to reduce price hike and provide relief to the common people.

    The prime minister expressed these views while talking to a delegation of Jefferies, a leading global investment banking and capital markets firm. Minister for Finance Ishaq Dar was also present during the meeting.

    The prime minister regretted that unfounded rumours were being spread about the economy of Pakistan and reprehensible efforts were being made to create havoc.

    He said the coalition government without caring for the political price, saved the country from the repercussions of the previous four years’ maladministration by the former government.

    He also reiterated that the government was making efforts to reduce the foreign trade deficit and providing all possible facilities to the foreign investors. 

    Welcoming the delegation, the prime minister invited the firm to open its office in Pakistan.

    The delegation termed the economic recovery of Pakistan as a good sign under the leadership of prime minister that faced the economic challenges in an effective manner and put the country on the path of economic stability.