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  • FBR issues procedure, collection of capital value tax

    FBR issues procedure, collection of capital value tax

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued procedure and collection of capital value tax (CVT).

    The government through Finance Act, 2022 imposed capital value tax on sale of immovable properties and motor vehicles.

    Following are the procedure and collection of the CVT.

    READ MORE: FBR may extend date for return filing tax year 2022

    Declaration of assets. – (1) Every person who is liable to pay capital value tax on assets mentioned in clauses (b) and (c) of sub-section (2) of section 8 of Finance Act, 2022 shall file the electronic declaration in Iris as set out in the Form- A attached to these rules.

    (2) The value of foreign assets shall be converted in rupees as per ready transactions exchange rates for mark to market revaluation notified by the State Bank of Pakistan applicable for the last day of the tax year.

    Statements to be filed by persons collecting capital value tax on motor vehicle. – (l) Every motor vehicle registration authority or a manufacturer or a person selling motor vehicle through auction liable to collect CVT in respect of motor vehicle in Pakistan shall furnish to the Commissioner a quarterly electronic statement in Iris as per schedule mentioned in sub-section (2) of section 165 of the Ordinance.

    (2) Every person liable to collect CVT in respect of motor vehicle in Pakistan shall also furnish to the Commissioner an annual electronic statement in Iris for the relevant tax year within thirty days of the end of tax year, in addition to statement to be filed under sub-rule (1) of this rule.

    READ MORE: FBR allows refund adjustment to facilitate return filing

    (3) The provisions of sub-sections (2A), (2B) and (4) of section 165 of the Ordinance shall, in so far as relevant, apply to statements filed under this rule.

    (4) The statement shall be filed in the manner as provided in Iris.

    Collection of capital value tax. (1) The tax required to be collected by a registration authority, manufacturer or a person selling motor vehicle through auction shall be paid by way of credit to the Federal Government through a computerized payment receipt (CPR) or SWAPS payment receipt (SPR) as set out in the Form ‘B’ attached to these rules.

    READ MORE: FPCCI seeks statutory time for return filing after error removals

    (2) The person required to pay tax in respect of foreign assets or assets specified by the Federal Government shall pay tax by way of credit to the Federal Government through a computerized payment receipt (CPR) at time the income tax return for the tax year is due for payment of tax on foreign movable assets, as set out in the Form ‘C-l’ and for payment of tax on foreign immovable assets, as set out in the Form ‘C-2’ appended to these rules.

    (3) All sums being capital value tax collected under section 8 of the Finance Act, 2022, shall be paid by way of credit to the Federal Government by remittance into the government treasury or in the authorized branches of the State Bank of Pakistan or the National Bank of Pakistan, –

    READ MORE: FBR advised to extend tax return filing date for three months

    (i) on the same day in case these have been collected by or on behalf of government;

    (ii) in other cases, such amount shall be paid within one week from the date of such collection.

  • Pakistani rupee recovers PKR 10.08 against dollar in five sessions

    Pakistani rupee recovers PKR 10.08 against dollar in five sessions

    KARACHI: The Pakistani Rupee (PKR) on Thursday continued its winning streak and gained PKR 10.08 against the dollar during past five straight sessions owing to assumption of Ishaq Dar the portfolio of the finance minister of the country.

    The local currency gained PKR 10.08 against the dollar during the last five sessions. The exchange rate reached near to record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 229.63 on September 29, 2022.

    READ MORE: PKR makes recovery against dollar for fourth straight session

    On Thursday, the exchange rate witnessed a gain of PKR 2.49 to end at PKR 229.63 to the dollar from previous day’s closing of PKR 232.12 in interbank foreign exchange market.

    Market analysts said that the assumption of the charge of the finance minister by Ishaq Dar impacted the market positively.

    A day earlier Ishaq Dar took oath as federal minister. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    READ MORE: PKR strengthens sharply to dollar during last three sessions

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • FBR may extend date for return filing tax year 2022

    FBR may extend date for return filing tax year 2022

    ISLAMABAD: Federal Board of Revenue (FBR) likely to extend the last date for filing income tax return for tax year 2022 considering the prevailing situation due to floods and technical issues on the online return form.

    The last date for filing income tax return for tax year 2022 is September 30, 2022. The FBR already announced that it would not extend the date and urged the taxpayers to make compliance within due date.

    READ MORE: FBR allows refund adjustment to facilitate return filing

    Sources in the FBR said that although no decision had been taken so far in this regard. However, the revenue body was considering seriously on the date extension sought by the business community.

    Chambers and association have approached the FBR to extend the last date for filing income tax return, which is expiring on September 30, 2022.

    Muhammad Idrees, President, Karachi Chamber of Commerce and Industry (KCCI) in a letter sent to the Finance Minister requested to issue to the FBR for extension in last date for filing income tax returns from September 30, 2022 to December 31, 2022 keeping in view the unusual situation emerging all over the country due to recent rainfalls and flash floods.

    He stated that the chamber was constantly being approached by the members of the business and industrial community and also by the people belonging to different walks of life who wanted the last date to be extended till December 31, 2022.

    READ MORE: FPCCI seeks statutory time for return filing after error removals

    “Due imposition of ban on imports which was followed by unusual situation all over the country emerging after torrential rainfalls and flashfloods, the taxpayers, particularly the members of the business & industrial community, are facing a lot of problems as a large portion of receivables from various parts of the country badly hit by floods are still pending,” he said.

    It was a well-known fact that the business, commercial, agricultural and all other activities in the flood-hit areas have come to a total halt which has created serious cashflow issues and it will take at least two more months to return to normalcy.

    In this scenario, it has become inevitable to provide relief to loyal taxpayers in shape of extension in last date hence, keeping in view the ground realities, he requested the Finance Minister to order FBR to extend the last date for filing income returns to December 31, 2022 which will be widely welcomed by the loyal taxpayers from all over the country.

    Besides, the return filing portal is also encountered with some glitches which the tax practitioners said those were not removed so far.

    READ MORE: FBR advised to extend tax return filing date for three months

    Karachi Tax Bar Association (KTBA) recently highlighted problems on the online return form. It said Column for adjustment of brought forward capital losses under the head of capital gains is not available in Income tax return form due to which tax on capital gain cannot be calculated correctly.

    The Column of tax credit for specified industrial undertakings u/s 65G of the Income Tax Ordinance, 2001 is inadvertently available in the Tax Credits Annexure of income tax return for salaried individuals, which has no correlation with such tax credit.

    Although the rate of tax on contract receipts under section 153 was reduced from 7.5 per cent to 7 per cent for Tax Year 2022, however, there is no column for such reduced rate in the return for the TY 2022 available on IRIS.

    The draft of manual return forms for the Individuals and AOPs for the Tax Year 2022 was issued belatedly on August 26, 2022, whereas the final SRO. 1733(1)/2022 was issued on September 13, 2022 meaning thereby only 17 days of time has been allowed to file the manual returns, which is insufficient as provided under the law.

    The IRIS portal is calculating incorrect tax liability on gain on sale of immovable properties in violation of section 37(1A) of the Income Tax Ordinance, 2001 which needs to be taken care off as soon as possible.

    The IRIS portal is calculating incorrect tax on profit/yield on Bahbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account in violation of clause (6) of Part-III, 2nd Schedule of the Income Tax Ordinance, 2001, which provides that tax shall not exceed 10 percent of such Profit/ Yield.

    READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    There lies no option list in drop downs country and currency under Code “7006” having description “Investment (Non-Business) (Account / Annuity / Bond / Certificate / Debenture / Deposit / Fund / Instrument / Policy / Share / Stock / Unit, etc.)” due to which a taxpayer remains unable to file the Foreign Income & Assets Statement under section 116A(1) of the Ordinance.

    Opening wealth is being shown in “Reconciliation of Net Assets” Value of opening net assets is being shown under code ‘703002’ despite the fact that the taxpayer’s residency status is selected as “non-resident” for Tax Year 2022 after which, he should not be required to file the wealth statement including reconciliation of net assets.

    The withholding rates on payment of Dividend @ 7.5 per cent, 15 per cent and 25 per cent, (under section 150 of the Ordinance) are appearing in the Income Tax Return Form of “Income for a person deriving income only from salary and other sources and the Column Code 64330052 (Dividend u/s 150 @25 per cent) is missing.

    Proviso was inserted under section 22(2) of the Tax Ordinance by Finance Act, 2020 whereby depreciation on additions to fixed assets made after 01-Jul-2020 would be reduced by 50 per cent However, when entries related to written down values are entered in in depreciation schedule as opening values, the IRIS is calculating depreciation at 50 per cent on total values.

  • Dar rejects allegations for keeping PKR overvalued

    Dar rejects allegations for keeping PKR overvalued

    ISLAMABAD: Federal Minister Ishaq Dar on Wednesday rejected allegations for injecting dollars to keep Pakistani Rupee (PKR) overvalued.

    Speaking to the media on arrival at the Finance Ministry, Federal Minister Ishaq Dar said the speculators will not be allowed to play with the local currency.

    READ MORE: PKR makes recovery against dollar for fourth straight session

    He rejected the impression that the PML (N) government in its tenure between 2013 and 2018 injected dollars in the market to keep the rupee overvalued.

    Dar said we rather took the foreign exchange reserves to record level of twenty three billion dollars. He said we believe in market economy, recalling it was the PML-N government which introduced market based exchange rate. Ishaq Dar said the country is facing difficult challenges but these will be tackled as was done in the past.

    READ MORE: PKR strengthens sharply to dollar during last three sessions

    Dar said stabilizing local currency and reducing inflation and interest rates are priorities of the government.  He said we do not believe in mere verbal claims rather history is testimony of our economic performance.

    Ishaq Dar expressed satisfaction over the appreciation of rupee over the last two days saying this has reduced our loans.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    The Federal Minister said the country is currently faced with worst economic crisis because of mismanagement of previous government of PTI. He said it was because of the efforts of former Finance Minister Miftah Ismail that the country averted default. He however said that the mess left behind the PTI government could not be cleared in six months.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    Ishaq Dar regretted that the PTI government during its last days in office violated the international agreements to take political mileage.

    As regards the case against him, Ishaq Dar said it is a fake. He said he has been a consistent tax payer over the last thirty four years and that he never delayed his tax returns. He said the previous government also cancelled his passport and it was the current coalition government which issued him a passport.

  • PKR makes recovery against dollar for fourth straight session

    PKR makes recovery against dollar for fourth straight session

    KARACHI: The Pakistani Rupee (PKR) continued recovery against the dollar for the fourth straight session on Wednesday owing to lower international oil prices and optimism prevailed over return of Ishaq Dar as the finance minister.

    The local unit strengthened by PKR 7.59 against the dollar during the last four sessions. The exchange rate reached near to record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 232.12 on September 28, 2022.

    READ MORE: PKR strengthens sharply to dollar during last three sessions

    On Wednesday, the exchange rate witnessed a gain of PKR 1.79 to end at PKR 232.12 to the dollar from previous day’s closing of PKR 233.91 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar on Wednesday took oath as federal minister. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    READ MORE: Rupee slumps for 15th straight session against dollar

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Dollar plummets to PKR 231.50 in early trade on Sept 28, 2022

    Dollar plummets to PKR 231.50 in early trade on Sept 28, 2022

    KARACHI: US dollar plummeted to Pakistani Rupee (PKR) at 231.50 in early interbank foreign exchange trading on Wednesday Sept 28, 2022.

    The dollar is being traded at PKR 231.50 while recording a fall of PKR 2.41 from previous day’s closing of PKR 233.91 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar sworn in as senator on Tuesday after returning to Pakistan. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

  • PTBA identifies ambiguity in property value declaration

    PTBA identifies ambiguity in property value declaration

    Pakistan Tax Bar Association (PTBA) on Tuesday identified ambiguity in declaring of immovable property in income tax return filing.

    PTBA President Rana Munir Hussain in a letter to the chairman of Federal Board of Revenue (FBR) stated that the apex tax bar had received several representations from the members of different affiliated tax bars across the country; one of the reasons of delay in filing of Income Tax Return for the Tax Year 2022 in is an ambiguity in declaration of value of the properties purchased and sold during the year.

    READ MORE: FBR allows refund adjustment to facilitate return filing

    The said burning issues need the consideration of the FBR in the light of prevailing circumstances.

    In this respect tax bar summarized the following questions: –

    Question No. 1

    A tax payer sold his immovable property in consideration of Rs.6,000,000/- through a written agreement to sell during the tax year 2022 and received the said amount in shape of pay order as provided u/s 75A of the Income Tax Ordinance 2001.

    READ MORE: FPCCI seeks statutory time for return filing after error removals

    Whereas at the time of execution of sale deed the parties were compelled to mention the sale price at Rs.7,500,000/- as per rate notified by the D.C being minimum price.

    The PTBA urged the FBR to clarify that can the tax payer (seller) incorporate the sale proceed at Rs.7,500,000/- as appearing on the registered sale deed in his wealth reconciliation statement or he will have to record the actual consideration of Rs.6,000,000/- received from the buyer?

    Question No. 2

    A tax payer sold his immovable property through agreement to sell in consideration of Rs.40,000,000/- and received the said amount in shape of pay order as provided u/s 75A of the Ordinance.

    READ MORE: FBR advised to extend tax return filing date for three months

    Sale deed was executed at Rs.45,000,000/- being the minimum price notified by D.C.

    On the other hand, the seller as well as the buyer paid the tax u/s 236C and 235K at the value fixed by FBR i.e. Rs.6,500,000/-.

    Clarification is sought.

    Whether the seller can record in his wealth statement the amount at Rs.65,000,000/- whereas in actual, he received Rs.40,000,000/-.

    What price of the asset has to declared by the buyer in his wealth statement?

    READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline

    The actual price paid at Rs.40,000,000/- ; OR

    The price fixed by D.C. at Rs.45,000,000/-; OR

    The price fixed by FBR at Rs.65,000,000/-.

    In the light of the submissions made above it is requested to issue a clarification as early as possible. Moreover, timely decision taking in this regard would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day and night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.

  • PKR strengthens sharply to dollar during last three sessions

    PKR strengthens sharply to dollar during last three sessions

    KARACHI: Pakistani Rupee (PKR) gained sharply against the US dollar during last three sessions on Tuesday on lower international oil prices and nomination of Ishaq Dar as finance minister.

    The local unit strengthened by PKR 5.80 against the dollar during the last three sessions. The exchange rate reached near to record low of PKR 239.71 on September 22, 2022 to the dollar but ended at PKR 233.91 on September 27, 2022.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    On Tuesday, the exchange rate witnessed a gain of PKR 3.11 to end at PKR 233.91 to the dollar from previous day’s closing of PKR 237.02 in interbank foreign exchange market.

    Market analysts said that the nomination of Ishaq Dar had sent positive sentiments to the foreign exchange market.

    Ishaq Dar sworn in as senator on Tuesday after returning to Pakistan. Previously, he was known to effectively control the exchange rate in the last tenure of PML (N) government.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    Meanwhile, the international oil prices are also crashed which helped the rupee to make gain.

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    READ MORE: Rupee slumps for 15th straight session against dollar

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.

  • Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Pakistan reviews petroleum prices on Sept 30, 2022 amid crash in global rates

    Pakistan is set to review petroleum prices on September 30, 2022 for the next fortnight starting from October 01, 2022. The government will review the prices when the prices in international markets have been crashed to multi months low.

    According to Reuters news agency oil prices fell $2 a barrel a day earlier, settling at nine-month lows in choppy trade, pressured by a strengthening dollar as market participants awaited details on new sanctions on Russia.

    READ MORE: New petroleum prices in Pakistan effective from September 21, 2022

    Brent crude futures for November settled down $2.09, or 2.4 per cent, to $84.06 a barrel, plunging below levels reached on January 14. U.S. West Texas Intermediate (WTI) crude for November delivery dropped by $2.06, or 2.3 per cent to $76.71, the lowest since Jan. 6.

    Previously, the government revised the petroleum prices on September 21, 2022, which was scheduled to be announced on September 15, 2022.

    According to a statement issued by the Finance Division, the government decided to increase prices of petrol by Rs1.45 per liter to Rs237.43 from previous rate of Rs235.98.

    READ MORE: New petroleum prices in Pakistan from September 01, 2022

    However, the government kept the price of high speed diesel (HSD) unchanged at Rs247.43 per liter.

    The price of kerosene oil has been reduced by Rs8.30 per liter to Rs202.02 from Rs210.32.

    Similarly, the rate of light diesel oil has been reduced by Rs4.26 per liter to Rs198.28 from previous rate of Rs201.54.

    It is pertinent to mention that the government to announce the prices of petroleum products in the wake of massive appreciation in rupee value as well. Besides, Ishaq Dar is also assuming the charge as finance minister. These factors would also impact the review.

    READ MORE: New petroleum prices in Pakistan from August 16, 2022

    The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.

    However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.

    READ MORE: New petroleum prices in Pakistan from August 1, 2022

    The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

    The exchange rate has seen massive decline in rupee value during past week despite inflows received from the International Monetary Fund (IMF).

    READ MORE: New prices of petroleum products in Pakistan from July 01, 2022

    Pakistani Rupee (PKR) has plunged by PKR 20 against the US dollar since the country received tranche from the International Monetary Fund (IMF). The country received a tranche of $1.16 billion from the IMF under Extended Fund (EFF) loan program on August 31, 2022.

    The government was hopeful of improvement in economic indicators once the money is received from the IMF. However, in contrast the PKR fell sharply since the IMF funds transferred to the State Bank of Pakistan (SBP).

  • Dollar plunges to PKR 233.50 in early interbank trading on September 27, 2022

    Dollar plunges to PKR 233.50 in early interbank trading on September 27, 2022

    KARACHI: US dollar plunged to Pakistan Rupee (PKR) 233.50 in early day trading on Tuesday September 27, 2022 owing to change of finance minister and falling international oil prices.

    The foreign currency lost PKR 3.52 and was being traded at PKR 233.50 by 10:00 AM (Pakistan Standard Time) as compared with last day closing of PKR 237.02 in interbank foreign exchange market.

    READ MORE: Dollar tumbles to PKR as market welcomes Dar nomination

    Currency analysts said that change of finance minister had impacted the market positively. The foreign exchange market reacted to the change a day earlier as well.

    Ishaq Dar has been nominated for the slot of Pakistan Finance Minister. He had already severed at this portfolio in the previous PML (N) government. Dar was known for controlling the exchange rate. Although many quarters had criticized him for artificial stabilizing the rupee. Dar is scheduled to take oath as finance minister today.

    READ MORE: PKR ends 15-day losing streak; recovers against dollar

    It is worth mentioning that the rupee on last Friday recovered against the dollar after witnessed a consecutive 15-session fall.

    During this period the local currency depreciated by PKR 21.10 against the dollar from the interbank closing on September 01, 2022 at PKR 218.60.

    The local currency witnessed the historic low at PKR 239.94 to the dollar on July 28, 2022.

    Currency experts said that the rupee was recovered because of contraction in current account deficit. Pakistan current account deficit recorded a contraction of 19 per cent during first two months (July – August) of the current fiscal year 2022/2023.

    Further, the experts said that the recent measures taken by the SBP also helped the rupee to gain value.

    However, the rupee failed to get support from the latest announcement of the State Bank of Pakistan (SBP) about the funds of Saudi Arabia.

    READ MORE: Rupee slumps for 15th straight session against dollar

    The rupee has witnessed a continuous depreciation against the greenback even after the inflows received from the International Monetary Fund (IMF).

    The local currency recorded some recovery against the greenback after the IMF fund was transferred to the State Bank of Pakistan (SBP). However, the removal of sanction on import of luxury and non-essential items the rupee again started free fall.

    READ MORE: Rupee ends near historic low; Dollar gains to PKR 239.65

    The currency experts said that although the IMF inflows would help the further inflows under bilateral and multilateral sources. However, the devastation of floods has changed the economic environment scenario.

    The torrential rains and flash floods have inflicted a loss of over $10 billion to Pakistan’s economy. The devastation will prompt the country to make imports in the coming days, especially for agriculture products.

    The rupee also fell due to continuous depletion in foreign exchange reserves of the country.