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  • SBP to announce monetary policy on July 16

    SBP to announce monetary policy on July 16

    KARACHI: State Bank of Pakistan (SBP) will announce key policy rate for next two months of July 16, 2019, a statement said on Friday.

    The SBP said that the Monetary Policy Committee of the central bank would meet on Tuesday, July 16, 2019 at SBP Head Office Karachi to decide the policy rate.

    In the previous monetary policy announced on May 20, 2019, the committee decided to increase the policy rate by 150 basis points to 12.25 percent effective from May 21,2019.

    The decision was taken into account the considerations and the evolving macroeconomic situation, the committee noted that further policy measures are required to address underlying inflationary pressures from (i) higher recent month-on-month headline and core inflation outturns; (ii) recent exchange rate depreciation; (iii) an elevated fiscal deficit and its increased monetization, and (iv) potential adjustments in utility tariffs.

    Analysts at Arif Habib Limited said that the SBP would adopt a proactive stance to increase its benchmark policy rate by 100 basis points in July 2019 to address the underlying pressure on the economy.

    In its report issued on June 28, the analysts said that in addition, monetary tightening is expected on the back of i) rising inflationary pressure due to increase in prices of petroleum products, essential food items and price revision of utilities, ii) an elevated fiscal deficit and its increased monetization, and iii) recent exchange rate depreciation.

  • SBP issues procedure for loans under PM’s Kamyab Jawan SME Lending Program

    SBP issues procedure for loans under PM’s Kamyab Jawan SME Lending Program

    KARACHI: The State Bank of Pakistan (SBP) on Thursday announced the official procedure for obtaining a loan under the Prime Minister’s Kamyab Jawan SME Lending Program, a flagship initiative aimed at empowering youth and small enterprises across the country.

    (more…)
  • Foreign remittances grow by 9.68pc to $21.84bn in 2018/2019

    Foreign remittances grow by 9.68pc to $21.84bn in 2018/2019

    Foreign remittances to Pakistan have surged by an impressive 9.68% during the fiscal year 2018/2019, reaching an unprecedented high of $21.84 billion.

    (more…)
  • Government to borrow Rs6,300 billion through auction of Market Treasury Bills in first quarter

    Government to borrow Rs6,300 billion through auction of Market Treasury Bills in first quarter

    KARACHI: The government likely to borrow an amount of Rs6,300 billion from commercial banks through auction of market treasury bills (MTBs) during first quarter (July – September) of current fiscal year.

    According to auction target for MTBs issued by State Bank of Pakistan (SBP), the amount would be raised through seven auctions during the period.

    The government borrows from commercial banks through sale of commercial papers for budget financing.

    The details of auctions showed the government would borrow primarily to repay the matured amount. The details further showed that out of Rs6,300 billion, an amount of Rs5,065 billion would be spent on repayment against matured amount.

    The remaining amount of Rs1,234.55 billion would be utilized for budget financing.

    Banking analysts said that the government had decided to change the borrowing pattern. During the past fiscal year most of the borrowings were made through central bank. However, the government under IMF loan program agreed not to borrow from the SBP.

    The auction target showed that an amount of Rs300 billion would be raised through sale of Pakistan Investment Bonds (PIBs) of fixed rates.

    While, an amount of Rs400 billion would be raised through sale of PIB (floating rates).

    Analysts said that the banks were taking more interest in government maturities due to frequent increase in policy rate by the SBP. The banking sector is anticipating more hike in interest rate by the SBP during remaining months of current year.

  • Pakistan’s foreign exchange reserves increase to $14.443 billion

    Pakistan’s foreign exchange reserves increase to $14.443 billion

    KARACHI: The total foreign exchange reserves of Pakistan increased by $92 million to $14.443 billion by week ended June 28, 2019 as compared with $14.351 billion in the previous week, the State Bank of Pakistan (SBP) said on Thursday.

    The SBP said that during the week ending June 28, 2019, it received inflow of $500 million from Qatar as placement of funds. After taking into account outflows relating to external debt and other official payments, SBP reserves decreased by $9 million during the week, it added.

    The reserves held by commercial banks increased by $101 million to $7.17 billion as compared with $7.069 billion.

  • Finance Act 2019: SBP to assist Customs against illegal fund transfers

    Finance Act 2019: SBP to assist Customs against illegal fund transfers

    ISLAMABAD: State Bank of Pakistan (SBP) will assist customs authorities in prevention of illegal inward or outward transfers of funds.

    According to Finance Act, 2019 a new Section 32C has been inserted to Customs Act, 1969, which stated:

    “32C. Mis-declaration of value for illegal transfer of funds into or out of Pakistan.- (1) Without prejudice to any action that may be taken under this Act or any other law, for the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa, or using other means including short-shipment, over-shipment, with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why penal action shall not be initiated:

    Provided that if goods have not been cleared from customs, such goods shall also be liable to be seized:

    Provided further that a team consisting of Additional Collector, duly assisted by an expert in the relevant field and an officer of State Bank of Pakistan (SBP) as specified, shall submit a report in writing with evidence for the Chief Collector. The said report shall also be furnished to the SBP for action, if any, under the law regulated by SBP.

    (2) Any proceedings under this section shall not be initiated without the explicit approval of the Board.”

    The Finance Act, 2019 also mentioned penalty for such offence:

    “Such person shall be liable to penalty not exceeding two hundred thousand rupees or three times the value of goods in respect of which such offence is committed whichever is greater; and such goods shall also be liable to confiscation; and upon conviction by a special judge he shall further be liable to imprisonment for a term not exceeding five years and to a fine which may extend upto one million rupees.”

  • Bank holiday

    Bank holiday

    KARACHI: The banks will remain close for public dealing on July 01, 2019, which will be observed as bank holiday on Monday.

    A notification issued on Thursday the SBP said that it will remain closed for public dealings on July 1, 2019 (Monday) which will be observed as Bank Holiday.

    All banks / Development Financial Institutions/ Microfinance Banks (MFBs) shall, therefore, remain closed for public dealings on the aforesaid date.

    However, all employees of the banks / DFIs / MFBs will attend the office as usual, the SBP said.

  • Pakistan’s forex reserves deplete by $288 million

    Pakistan’s forex reserves deplete by $288 million

    KARACHI: The liquid foreign exchange reserves of Pakistan fell by $288 million to $14.351 billion by week ended June 21 as against $14.639 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by the central bank were depleted by $322 million to $7.282 billion as compared with $7.604 billion a week ago.

    The SBP said that its official reserves were declined due to external debt servicing and other official payments.

    The foreign exchange reserves held by commercial banks witnessed increase of $35 million to $7.069 billion from previous week’s level of $7.034 billion.

  • SBP relaxes tax non-filer condition

    SBP relaxes tax non-filer condition

    KARACHI: The State Bank of Pakistan (SBP) on Wednesday relaxed non-filer condition for depositing into to foreign currency accounts in order to facilitate declarants of tax amnesty scheme 2019.

    Referring Assets Declaration Ordinance, 2019 (ADO), the central bank said that the Ordinance had been promulgated with a view to provide for voluntary declaration of undisclosed assets, sales and expenditures, for the purposes of allowing the non-documented economy’s inclusion in the taxation system and economic revival and growth by encouraging a tax compliant economy/ culture.

    In terms of Section 8 of the ADO, the declaration made shall be valid if the foreign currency held in Pakistan declared under Section 3 is deposited into declarant’s own foreign currency bank account at the time of declaration and is retained in such account till 30th June, 2019.

    “It is clarified that notwithstanding any instructions to the contrary contained in the Foreign Exchange Manual, a declarant, including a non-filer can deposit foreign currency in cash into his/her bank account under the ADO.”

    Similarly, the provision of Foreign Exchange Manual, Chapter 6, para 1(vi) regarding deposit of foreign currency notes in foreign currency accounts exceeding USD 10,000/- (or equivalent in other currencies) in a single day, shall not be applicable to such deposits made under the ADO.

    However, the banks while accepting such deposits under the ADO shall obtain a copy of the declaration filed with the Federal Board of Revenue (FBR) by the declarant and accept the deposit only if the amount being deposited is equivalent to the amount declared in the declaration filed with FBR.

    The banks shall ensure the confidentiality and secrecy of the information contained in the declaration submitted to them by declarants along-with deposit request.

    The banks shall submit to the State Bank of Pakistan (SBP) a statement as annexed hereto, within 7 (seven) days of close of the scheme.

  • Rs260 billion to be documented through withdrawal of Rs40,000 bearer bonds in first phase

    Rs260 billion to be documented through withdrawal of Rs40,000 bearer bonds in first phase

    KARACHI: The government will document an amount of Rs260 billion in first phase by withdrawing Rs40,000 denomination bonds.

    The government has announced to stop circulation of high denomination bearer bonds in order to curb the black economy.

    Till February 2019 the central directorate of national savings issued Rs259.22 billion bonds of Rs40,000.

    On Jane 24, 2019 State Bank of Pakistan (SBP) issued instructions to commercial banks for not selling Rs40,000 Prize Bonds. The SBP also issued procedure for exchanging the bonds with premium bonds or documented saving certificates by March 2020.

    According to Economic Survey of Pakistan 2018-2019 the CDNS had planned to convert all bearer bonds into documented securities.

    A staggering amount of Rs939 billion has been invested in bearer bonds up to February 2019.

    Market sources said the holders of bearer bonds worth Rs40,000 were desperate to exchange and were even offering to exchange much lower rates in order to avoid questioning.

    The sources further said that many of those holders were desperate to exchange with US dollar and other foreign currencies, which put pressure on the local currency.

    The rupee hit all time low at Rs165 to a dollar in Interbank Foreign Exchange Market on Wednesday.

    On the other hand the FBR is also planning to question the persons exchanging the bearer bonds regarding source of investment.