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  • ECC approves grant for salary disbursement to PSM employees

    ECC approves grant for salary disbursement to PSM employees

    ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet on Thursday approved a grant for disbursement of Rs1.38 billion of projected salary to employees of Pakistan Steel Mills (PSM).

    The ECC considered and approved a summary of Ministry of Industries & Production (MoIP) and allowed the payment of projected net salary of Rs1.378 billion for the Financial Year 2022-2023 to be disbursed every month to Pakistan Steel Mills (PSM) employees through a technical supplementary grant.

    READ MORE: ECC approves clearance of banned items landed till August 18, 2022

    This decision will ensure the disbursement of monthly salaries to the employees.

    This was approved in ECC of Cabinet meeting Chaired by Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar.

    Federal Minister for National Food Security and Research Chaudhary Tariq Bashir Cheema, Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Shahid Khaqan Abbasi MNA/ex-PM, Minister of State for Petroleum Musadik Masood Malik, SAPM on Finance Tariq Bajwa, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, Federal Secretaries and senior officers attended the meeting.

    READ MORE: USC to disburse ration bags worth Rs540 million to flood victims

    Ministry of Commerce presented a summary on amendment in Import Policy Order 2022 to allow import of the Holy Quran subject to NOC from the relevant Federal or the Provincial Authority.

    The summary was presented in the light of the directions of the honourable Lahore High court and Baluchistan High court directing the Federal and Provincial authorities to ensure only error-free printing, publishing, recording and import of copies of the Holy Quran. The proposed amendment of import of the Holy Quean was subject to NOC. The ECC after discussion approved the proposal.

    The ECC also approved another summary of Ministry of Commerce seeking amendment in the earlier decision of the ECC dated 25-07-2022 on Regionally Competitive Energy Rates for Export Oriented Sectors during FY 2022-23 and allowed amendment that “the electricity tariff will be effective from 1st August, 2022, whereas RLNG tariff will be effective from 1st July, 2022.”

    READ MORE: Pakistan State Oil gets Rs30 billion to avoid default

    The ECC considered a summary of Petroleum Division and allowed to grant a Development and Production Lease (D&PL) for (15) fifteen years w.e.f 15-01-2022 over Kandhkot Mining Lease area on existing Gas Price and subject to the condition that M/s PPL will pay all the financial obligations in accordance with Petroleum Policy 2012.

    Kandhkot discovery was made by PPL in 1959. The Government granted the mining lease over Kandhkot Gas field for a period of 30 years in 1962 which was renewed for further thirty years in 1992.

    Petroleum Division submitted another summary on revival of revoked petroleum exploration licenses. It was informed that (11) eleven exploration licenses were revoked due to non performance of work commitment and non-payment of financial obligations by various exploration & production companies.

    In all the eleven blocks, status quo order was passed by the respective Civil Courts, Islamabad and Sindh High Courts. It is pertinent to mention that the litigant companies have approached the government and shown keen interest in exploration of the blocks awarded. In order to resolve this longstanding issue of litigation, which has resulted in halting of exploration and production activities in some of the respective blocks of the country, Petroleum Division has developed a framework for revival of revoked licenses through out of court settlement.

    The ECC after detail discussion approved the proposed framework.

    READ MORE: Pakistan decides to lift ban on imported goods

    The ECC approved another summary of Petroleum Division for change of effective control from M/s Eni ULX Limited, M/s Eni UK Limited and M/s Eni Oil Holdings B.V, in respect of its subsidiary companies i-e M/s ENI Pakistan Limited , ENI

    Pakistan (AEP) Limited and ENI Pakistan (M) Limited , respectively to M/s Prime International Oil & Gas Company Limited (PIOGCL) subject to condition that PIOGCL shall be liable to the Government for all the minimum work commitments and financial obligations and Government’s revenue s will not be adversely affected after this change of effective control.

    Ministry of National Health Services, Regulations and Coordination presented a summary on proposal for increase in Maximum Retail Price (MRPs) of Paracetamol products. The ECC approved following agreed price of Paracetamol products.

    DescriptionProduct Current Price (Rs.)Demand Price (Rs.)Agreed Price (Rs.)
    Plain 500mg1.872.672.35
    Extra 500mg2.193.322.75
    Liquid104.8117.6117.6

    The ECC also approved Technical Supplementary Grants of Rs. 30,888.5 million in favour of Defence Division and Rs. 1000 Million for Ministry of Housing and Works.

  • SBP’s weekly forex reserves dip by $157 million to $7.44 billion

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

    KARACHI: The official weekly foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $157 million to $7.44 billion by week ended October 21, 2022, the central bank said on Thursday.

    The official foreign exchange reserves of the SBP were at $7.597 billion a week ago i.e. October 14, 2022.

    READ MORE: Pakistan’s weekly forex reserves increase nominally

    The central bank attributed the decline to external debt repayments.

    SBP however said it h ad received $1.5 billion from Asian Development Bank (ADB) in value on October 26, 2022 as disbursement of loan for the Government of Pakistan. These proceeds will be reflected in SBP reserves for the week ending October 28, 2022.

    READ MORE: Pakistan’s forex reserves continue to fall; deplete to $13.25 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 $12.706 billion.

    Previously, the central bank received $1.16 billion from the International Monetary Fund (IMF) under Extended Fund Facility (EFF) program, which increased the official reserves to $8.8 billion. But scheduled repayment gradually depleted the official reserves of the central bank.

    READ MORE: Pakistan’s forex reserves decline to $13.59 billion

    The total foreign exchange reserves of the country fell by $89 million to $13.162 billion by week ended October 21, 2022 as compared with $13.251 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 $14.066 billion.

    The foreign exchange held by commercial banks witnessed an increase of $68 million to $5.722 billion by week ended October 21, 2022 as against $5.654 billion a week ago.

    READ MORE: State Bank’s forex reserves shrink to $8 billion

  • SBP receives $1.5 billion from Asian Development Bank

    SBP receives $1.5 billion from Asian Development Bank

    State Bank of Pakistan (SBP) on Wednesday night said it received $1.5 billion from Asian Development Bank (ADB) as disbursement of policy based loan for Pakistan.

    In a Tweet on Wednesday late night, the central bank said that it had received $1.5 billion from the ADB in value October 26, 2022 as disbursement of policy based loan for the government of Pakistan.

    “These proceeds have increased the foreign exchange reserves of SBP and will be reflected in the reserves for the week ending October 28, 2022,” it added.

    READ MORE: Asian Bank approves $1.5 billion to finance Pakistan

    Earlier an official statement revealed that the ADB released $1.5 billion to the SBP under Building Resilience Under Active Countercyclical Expenditures (BRACE) Program.

    The BRACE program aims to support the government’s efforts to deal with the adverse impacts of devastating floods, supply chain disruptions, rising energy, fuel prices and inflation on the poor and vulnerable.

    READ MORE: FATF removes Pakistan from grey list

    It would expand the number of families receiving cash transfers through Benazir Income Support Programme (BISP) from 7.9 million to 9 million, increase the number of children enrolled in primary and secondary schools, and enhance geographic coverage of health services and nutritional supplies for pregnant and lactating mothers and children under 2 years old.

    The program is completely aligned with the Government’s strategy to provide targeted and temporary countercyclical relief measures.

    The facility aims to support deployment of planned countercyclical development expenditure and will promote sound macroeconomic management.

    READ MORE: Foreign direct investment in Pakistan plunges by 47% in 1QFY23

    The program is also in line with the framework of ongoing International Monetary Fund (IMF) program to implement necessary structural reforms to improve the country’s macroeconomic prospects.

    It will also enhance support for business entities to safeguard employment and would help increasing food security measures as well. Furthermore, it will also strengthen social safety net and fiscal measures for the government’s crisis response.

    The BRACE program amounting to US$ 1.5 billion was approved by the ADB Board on Friday, 21st October 2022.

    This program was initially conceived and approved by the ADB’s Board in May 2022 under a new Countercyclical Support Facility (CSF) to provide targeted support to its developing member countries (DMCs) facing emergency situations.

    READ MORE: Pakistan’s weekly forex reserves increase nominally

    The signing ceremony of the BRACE Program was held on 24th October 2022 at Prime Minister House, which was witnessed by the Prime Minister of Pakistan, Federal Minister for Economic Affairs, Sardar Ayaz Sadiq, Federal Minister for Finance and Revenue, Senator Ishaq Dar along with Director General ADB Central and West Asia Department.

  • Foreign direct investment in Pakistan plunges by 47% in 1QFY23

    Foreign direct investment in Pakistan plunges by 47% in 1QFY23

    Foreign Direct Investment (FDI) into Pakistan has plunged by 47 per cent during first quarter (July – September) 2022/2023, according to data released by State Bank of Pakistan (SBP).

    The central bank said that the FDI fell to $253 million during the first quarter of the current fiscal year as compared with $479 million in the corresponding quarter of the last fiscal year.

    READ MORE: FATF removes Pakistan from grey list

    The inflows under the FDI recorded 31.7 per cent decline to $395 million during the quarter under review as compared with $579 million in the same quarter of the last year.

    On the other hand, the outflow under the FDI significantly increased by 42.5 per cent to $142 million during July – September 2022/2023 as compared with $99.6 million in the same period of the last fiscal year.

    READ MORE: Asian Bank approves $1.5 billion to finance Pakistan

    The total foreign private investment into the country fell by 36.3 per cent to $241.3 million during the quarter under review when compared with $379 million in the corresponding quarter of the last fiscal year.

    The portfolio investment in the capital market registered massive decline in outflow during the quarter under review. The outflow of portfolio investment recorded $12.1 million during the first quarter of the current fiscal year as compared with the outflow of $100.5 million in the same quarter of the last year.

    READ MORE: Pakistan’s weekly forex reserves increase nominally

    The foreign public investment under the head of debt securities recorded an outflow of $18.2 million during the first quarter of the fiscal year 2022/2023 as compare with inflow of $980 million in the same quarter of the last fiscal year.

    The total foreign investment including private and public recorded a decline of 83.6 per cent to $223 million during the first quarter of the current fiscal year as compared with $1.36 billion in the same quarter of the last fiscal year.

    READ MORE: Current account deficit declines by 37% to $2.21 billion in first quarter

  • FATF removes Pakistan from grey list

    FATF removes Pakistan from grey list

    Financial Action Task Force (FATF) on Friday decided to remove Pakistan from grey list after the country made compliance with the conditions.

    FATF is the world’s money laundering and terror-financing watchdog. It said that Pakistan has been removed from the grey list and is no longer subject to its increased monitoring process.

    The Paris-based inter-governmental body had put Pakistan on its grey list of untrustworthy jurisdictions in June 2018 because of “strategic counter-terrorist financing-related deficiencies.”

    Plenary meeting of the FATF ended and made decision regarding Pakistan.

    Earlier, Analysts at Arif Habib Limited said: “We expect Pakistan to be taken off the grey list by the FATF amid the progress Pakistan has made so far against money laundering and terrorist financing (AML/CFT) in the past few years.”

    To recall, Pakistan was placed on FATF’s Grey List in June 2018 whereby it was found non-compliant with recommendations of the FATF which targeted areas of risk assessment, national cooperation, targeted sanctions, preventative measures, due diligence, internal and third party controls, law enforcement, regulation and supervision for money laundering and terror financing, amongst others.

    Skip forward to 2022, the FATF Plenary in June, under the German Presidency of Dr. Marcus Pleyer, acknowledged the progress Pakistan made against money laundering and terrorist financing (AML/CFT) with all 34 action points implemented.

    Through various bills and amendments, the Pakistani authorities had diligently worked to satisfy the FATF. These related to laws against money laundering, freezing of assets and filing of cases against proscribed organizations, actions against terror financing etc.

    However, final decision to take Pakistan off the grey list was conditional upon successful on-site visit of FATF. FATF team conducted on-site visit to Pakistan few weeks back, with a purpose of inspecting the legal, regulatory and operational reforms and procedures implemented for compliance.

    The analysts said that following the exit from the list, Pakistan will still be required to work with the APG (its relevant regional bodies) in the regular course of the follow-up process to make further improvements in its AML & CFT framework, as and when required.

    Having already suffered direct consequences and economic difficulties from its time on the grey list, the climactic graduation of Pakistan from the grey list will come no less than a breath of fresh air. It will be a major relief and accomplishment for Pakistan, and is expected to reap benefits in both, short and long run.

    The immediate ramification of exiting grey list carries reputational implication for Pakistan, we believe. This positive development bodes well for Pakistan’s image which was recently further dented by the downgrading of rating by International Credit Rating agencies like Moodys.

    With the international community—investors in particular, the removal from grey list is likely to strengthen Pakistan’s position especially with regards to the soundness of our financial systems and help regain their confidence.

    Markets are expected to react positively to this news and overall sentiment is likely to remain upbeat for a while. Moreover, going forward, this should also help strengthen Pakistan’s case of re-rating and upgrading by the International Credit Rating agencies.

    In addition, one of the structural benchmarks laid down by the IMF for Pakistan stated ‘Adoption of measures to strengthen the effectiveness of the AML/CFT framework to support the country’s efforts to exit the Financial Action Task Force (FATF) list of jurisdictions with serious deficiencies.’ This means, Pakistan complies with one more structural benchmark of the IMF, paving way for successful ninth review which is due in November 2022 enabling disbursement of SDR 894 million from the Fund.

  • Pakistan set to exit FATF grey list

    Pakistan set to exit FATF grey list

    Plenary meeting of the FATF ends on Friday and a decision regarding Pakistan, whether to remove from grey list or not, is expected to be announced.

    “We expect Pakistan to be taken off the grey list by the FATF amid the progress Pakistan has made so far against money laundering and terrorist financing (AML/CFT) in the past few years,” said analysts at Arif Habib Limited.

    To recall, Pakistan was placed on FATF’s Grey List in June 2018 whereby it was found non-compliant with recommendations of the FATF which targeted areas of risk assessment, national cooperation, targeted sanctions, preventative measures, due diligence, internal and third party controls, law enforcement, regulation and supervision for money laundering and terror financing, amongst others.

    Skip forward to 2022, the FATF Plenary in June, under the German Presidency of Dr. Marcus Pleyer, acknowledged the progress Pakistan made against money laundering and terrorist financing (AML/CFT) with all 34 action points implemented.

    Through various bills and amendments, the Pakistani authorities had diligently worked to satisfy the FATF. These related to laws against money laundering, freezing of assets and filing of cases against proscribed organizations, actions against terror financing etc.

    However, final decision to take Pakistan off the grey list was conditional upon successful on-site visit of FATF. FATF team conducted on-site visit to Pakistan few weeks back, with a purpose of inspecting the legal, regulatory and operational reforms and procedures implemented for compliance.

    The analysts said that following the exit from the list, Pakistan will still be required to work with the APG (its relevant regional bodies) in the regular course of the follow-up process to make further improvements in its AML & CFT framework, as and when required.

    Having already suffered direct consequences and economic difficulties from its time on the grey list, the climactic graduation of Pakistan from the grey list will come no less than a breath of fresh air. It will be a major relief and accomplishment for Pakistan, and is expected to reap benefits in both, short and long run.

    The immediate ramification of exiting grey list carries reputational implication for Pakistan, we believe. This positive development bodes well for Pakistan’s image which was recently further dented by the downgrading of rating by International Credit Rating agencies like Moodys.

    With the international community—investors in particular, the removal from grey list is likely to strengthen Pakistan’s position especially with regards to the soundness of our financial systems and help regain their confidence.

    Markets are expected to react positively to this news and overall sentiment is likely to remain upbeat for a while. Moreover, going forward, this should also help strengthen Pakistan’s case of re-rating and upgrading by the International Credit Rating agencies.

    In addition, one of the structural benchmarks laid down by the IMF for Pakistan stated ‘Adoption of measures to strengthen the effectiveness of the AML/CFT framework to support the country’s efforts to exit the Financial Action Task Force (FATF) list of jurisdictions with serious deficiencies.’ This means, Pakistan complies with one more structural benchmark of the IMF, paving way for successful ninth review which is due in November 2022 enabling disbursement of SDR 894 million from the Fund.

  • Asian Bank approves $1.5 billion to finance Pakistan

    Asian Bank approves $1.5 billion to finance Pakistan

    Asian Development Bank (ADB) has approved $1.5 billion in financing to help Pakistan provide social protection, promote food security, and support employment for its people amid devastating floods and global supply chain disruptions.

    In a statement issued on Friday, the ADB said the loan, provided under ADB’s Building Resilience with Active Countercyclical Expenditures (BRACE) Program, will help fund the government’s $2.3 billion countercyclical development expenditure program designed to cushion the impacts of external shocks, including the Russian invasion of Ukraine.

    “Pakistan’s recovery from the COVID-19 pandemic has been impeded by external shocks,” said ADB Director General for Central and West Asia Yevgeniy Zhukov.

    “Increasing business costs and rising living expenses are affecting millions of Pakistanis, especially the poor and vulnerable. ADB’s program will help the government manage the impacts of high prices, increasing food insecurity, slowing business activity, and reducing income for vulnerable groups, many of whom are also reeling from the devastating floods.”

    ADB’s financing will provide the fiscal space needed for the government to implement its countercyclical development expenditure package, which is designed to target the poorest families in Pakistan who are often disproportionately affected in times of crisis.

    The government’s support includes specific measures to promote gender empowerment and climate change adaptation, which have become even more important in light of the recent floods.

    ADB’s assistance will help to expand the number of families receiving cash transfers from 7.9 million to 9 million, increase the number of children enrolled in primary and secondary schools, and enhance geographic coverage of health services and nutritional supplies for pregnant and lactating mothers and children under 2 years old.

    “The program is part of a comprehensive and well-coordinated package of support. It will help the government deal with the impact of the immediate shocks to the economy, while, in parallel, continue the structural reforms that are necessary to improve the country’s medium- to long-term macroeconomic prospects,” said ADB Director for Public Management, Financial Sector, and Trade Tariq Niazi.

    “We are working closely with the International Monetary Fund and other development partners to ensure that our support through policy dialogue, technical assistance, and program lending is well-coordinated and that, ultimately, we are able to help the government improve Pakistan’s resilience to shocks.”

    ADB’s $1.5 billion countercyclical support is part of a significant response package to support people, livelihoods, and infrastructure in Pakistan in the wake of the recent floods which have affected over 33 million people and caused extensive damage to infrastructure and agriculture.

    Pakistan was a founding member of ADB. Since 1966, ADB has committed over $37 billion in loans, grants, and other forms of financing to promote inclusive economic growth in Pakistan and improve the country’s infrastructure, energy and food security, transport networks, and social services.

  • Pakistan’s weekly forex reserves increase nominally

    Pakistan’s weekly forex reserves increase nominally

    Pakistan’s weekly foreign exchange reserves increased nominally to $13.251 billion by week ended October 14, 2022, State Bank of Pakistan (SBP) said on Thursday.

    (more…)
  • Pakistan will not default: Ishaq Dar

    Pakistan will not default: Ishaq Dar

    ISLAMABAD: Finance Minister Mohammad Ishaq Dar on Wednesday said there was no question of Pakistan going into default as the same had been averted, though at a very high political cost.

    “I want to give a message to markets through this conference… no need to get nervous, we are back to business, Insha’Allah we will arrange everything. Nothing is to worry,” the minister said while addressing here the All Pakistan Chartered Accountant Conference.

    READ MORE: Pakistan’s forex reserves continue to fall; deplete to $13.25 billion

    He said Pakistan would be fine and nobody should have any problem because “Pakistan will not default”. There were serious challenges the country had been facing, however, the incumbent government had rescued it from default although it had to give a very high political cost.

    “If there is a choice between state or politics, the priority should be the state and not the politics as if the country is there, there may be politics. If there is no county where there will be politics?” he asked.

    Ishaq Dar said Pakistan would require around $32-34 billion to fulfill its liabilities and financial needs for the fiscal year 2022-23. “These include around $22 billion multilateral-level debt liabilities and around $12 billion current account deficit.”

    He, however, vowed that the government would work hard to fulfill the sovereign guarantees to save the country’s pride.

    The minister once again clarified the government’s position about rescheduling of the Paris Club’s debts. He said soon after assuming the charge of finance ministry, he had announced that the government would not approach the Paris Club for rescheduling of loans.

    READ MORE: Home remittances decline to $7.68 billion in 1QFY23

    Likewise, he also rejected the speculations about extending bond maturity dates beyond December 2022. Pakistan, he said, was a sovereign country so it should meet its obligations in time for its own credibility and honour.

    He urged the chartered accountants to play their role and influence politicians to work for the betterment of national economy.

    Ishaq Dar said Pakistan had deep challenges which were further increased by the devastating floods. He, however, was confident that everything would be corrected as was done back in 1998-99 and 2013, when the country was facing similar challenges.

    He said in its last tenure, the Pakistan Muslim League-Nawaz government had put the economy on growth path and it was predicted that it would be become the 18th big economy, leaving behind Canada and Italy, however, due to political interest of some parties it could not be done.

    Had the political parties joined the hands together, the country would have achieved the target of becoming the 18th big economy by 2026, however due to political instability, it now stood at 54th position, he lamented.

    He had always favoured a ‘Charter of Economy’ that would help put the economy on a sustainable growth path, he remarked.

    The minister said the PML-N assumed power in 2013 at a time when the country was facing serious macroeconomic challenges and its was predicted to be going in default in six to seven months.

    However, the government fixed the problems and took the economy towards growth, he added. The whole world acknowledged the progress at that time while the country’s ratings went up, the Consumer Price Index (CPI) based inflation was recorded at 4 percent and food inflation at 2 percent. The country had stable currency around Rs104 in parity with dollar and had reserves of around $26 billion.

    READ MORE: Moody’s downgrades Pakistan rating to Caa1 from B3

    Had that journey been allowed to continue, the country would have become the member of G20 club and 18th big economy, the minister said.

    Replying to a question, Dar said that in 2013 Pakistan was on the virtual black List of FATF and due to the hard work by the then PML(N) government, the country was moved into the grey list in 2014 followed by the white list in 2015.

    “I had done my projection for the economy and the prime minister is better aware of it,” he said, adding that the government was working on his projections to revive the economy.

    To a question, he said the previous government impeded the CPEC projects which led to its increased cost.

    READ MORE: Rupee plunges to PKR 220.88 against dollar in interbank

    Dar said the inflation did not surge all of a sudden rather it was due to the incompetence of the previous PTI government over the last four years, pushing the country to the prevailing situation.

    However, he added, the incumbent government was working to stabalize macroeconomic indicators to control the inflation.

    The minister said the dollar appreciated artificially which would be brought down to its natural value below Rs 200.