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December 20, 2022 / By Zunair Tahir / Business News

The decision to limit market hours to 8 p.m. on Monday was made by Prime Minister Shehbaz Sharif in order to conserve energy. He also instructed the relevant agencies to take action.

Participants at a meeting on the energy sector, presided over by the prime minister, discussed adopting a comprehensive plan to handle the current circular debt in the oil and gas industries.

The Pakistan Muslim League-Nawaz (PML-N) administration, according to the Prime Minister’s Office (PMO), declared had totally eliminated the circular debt during its 2013–2018 term in office. He promised to use consistent efforts and smart planning to get the debt issue under control.

PM Sharif gave the order to implement energy sector reforms in such a way that the circular debt could be paid off.

The prime minister was cited as stating that Sui gas distribution firms should enhance their bill-recovery procedures and that users of gas and electricity should not be subjected to any additional costs.

To preserve power and gas, Shehbaz orders all marketplaces in Pakistan to close at 8 p.m.

He stated that it was important to make the mechanism for paying gas and electricity bills efficient.

The federal cabinet will receive an overview of the energy-saving strategy on Tuesday during the meeting.

To get their input on the matter, the chief ministers of the provinces have also been called to the cabinet meeting.

According to the prime minister, it is important to combat gas and power theft and losses in the energy transmission system.

According to media sources citing the electricity division, the circular debt, which was Rs2.253 trillion by the end of September last year, has increased by Rs185 billion to reach Rs2.437 trillion.

The government has decided to limit market hours nationwide till 8pm in an effort to save gas and power.

According to a government source, the federal cabinet will convene on Tuesday to discuss the execution of an energy conservation plan, which is the only item on the agenda.

The plan to save energy, according to the source, was developed to stabilize the economy, save energy, and reduce import costs since the country was in an unusual position that called for extraordinary action.

All provincial governments were requested to do their homework about an energy conservation strategy, including market closing times till 8 o’clock, at the most recent meeting.

The proposal will be presented at the upcoming cabinet meeting for final approval, and all chief ministers will be called so that it can be put into action in conjunction with provincial governments, according to information minister Marriyum Aurangzeb.

The proposal calls for a crackdown on electricity theft and the conversion of several public and private structures to solar power.

The emergency energy saving plan’s primary goal is to relieve pressure on individuals and the economy as a result of the ongoing increase in oil and gas prices on the international market.

Dr. Talha Muhammad Younis Al Kashmiri has been named the PM’s coordinator for Arab digital media, and Mr. Waqas Mehmood has been named the PM’s coordinator for digital media, according to Prime Minister Shehbaz Sharif.

The prime minister made both of the positions on an honorary basis.

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$1.5 Billion ADB Loan Agreement, PKR Increases By 68 Paisa versus The Dollar

October 25, 2022 / By Zunair Tahir / Business News

In the interbank market on Tuesday, the Pakistani rupee (PKR) appreciated by 68 pesos in relation to the US dollar.

According to the State Bank of Pakistan, the local currency increased by 68 paisa or 0.31 percent from yesterday’s finish of Rs220.41 to conclude at Rs219.73 per $1.

The Rupee’s Comeback Is It Only Temporary?

October 12, 2022 / By Zunair Tahir / Business News

How the US dollar performs versus other major currencies and how rapidly our external sector indicators improve will largely determine if Finance Minister Ishaq Dar can lower the exchange rate to Rs200 per US dollar, as he has frequently indicated. In relation to the major currencies of the globe, the US dollar seems destined to hold its current strength and maybe even increase it.

There is potential for the external economy to develop. But assuming that sufficient advancement would be made during this fiscal year is overly optimistic. Therefore, we shouldn’t expect the rupee to appreciate in value during this quarter or the following two quarters of this fiscal year in a “sustainable and large” way.

On September 22, the Pakistani rupee saw an all-time low of 239,71 to the US dollar. Since then, it has appreciated significantly, gaining 8.25 percent. On October 7, it came to a close at 219.92 per dollar.

The rupee, which has already increased significantly during the last two weeks ending on October 7, might yet rise further but only little. However, we shouldn’t rule out the likelihood of brief declines in the local currency during this quarter and later.

The current exchange rate increase is not just the result of optimistic feelings sparked by Mr. Ishaq Dar’s homecoming; rather, it has also been influenced by the decreasing dollar index since September 28.

The US dollar index, which gauges the health of the dollar against a basket of the six most important international currencies, has been declining since its peak on September 27. However, that does not imply that the US dollar’s upward trajectory has stopped or reversed. That only reveals the impact of the extraordinary tightening of interest rates by the Central Bank of Europe, the Bank of England, and the uncommon UK and Japanese involvement in the foreign exchange market as the “reverse currency war” rages on.

Central banks from all of the world’s major economies are waging a “war” to defend their own currencies. This conflict was started by the US Federal Reserve. As the Fed has stated it would maintain hiking interest rates to combat the US’s decades-high inflation, it may be anticipated that they will continue to do so.

What does this all signify for the dollar-rupee exchange rate? It follows that the rupee’s relative strength against them will continue to decline, most notably against the reference currency of the USD, as all major world currencies, including the USD, Euro, Japanese Yen, and Chinese Yuan, march forward – at varying rates.

The recent rupee rebound is not just attributable to the optimism sparked by Mr. Ishaq Dar’s reappointment as finance minister. It has also been influenced by the US dollar index’s brief decline that began on September 28.

On September 22, as the US dollar index was still actively setting new records, the rupee plunged to an all-time low against the dollar, falling to 239.71. Later, the “Dar factor” and the falling dollar index supported the rupee’s rebound.

It is well known that Dar insisted on maintaining the artificially high value of the rupee in defiance of the then-leadership of the State Bank of Pakistan (SBP). The magnitude of the current account deficits and other pertinent external account statistics from FY14 to FY17 are other items that are available to everyone.

The rupee was maintained in an artificially stable position, as is evident from a close analysis of the balance of payments accounts for those four years. For instance, even though we had a $12.1 billion current account deficit in FY17, the rupee was remarkably steady, losing just 10 paisa to the US dollar annually!

But that was then. Now, times have changed.

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Rupee Rises Rs1.7 Versus The Dollar In Interbank Trading As The Uptrend Continues

October 5, 2022 / By Zunair Tahir / Business News

On Wednesday, the rupee extended its gains against the dollar, increasing by almost Rs1.7 in the interbank market at close.

The State Bank of Pakistan reported that the exchange rate of the local currency for the dollar was Rs223.94 (SBP). This is a rise of 0.76 percent from the close of Rs225.64 yesterday.

UK Pound Drops To 37-Year Low

September 17, 2022 / By Zunair Tahir / Business News

The British pound hit new lows against the US dollar and the euro on Friday, marking the 30th anniversary of “Black Wednesday,” as weaker-than-expected retail overall sales fueled concerns about the country’s economy.

In terms of the dollar, the pound dropped more than 1% to $1.1351—its lowest level since 1985—and was most recently trading at $1.1404.

A further significant rate rise from the Federal Reserve next week has been priced in by markets as a result of this week’s hotter-than-expected U.S. inflation, which has made the dollar stronger than most other major currencies in recent months.

The euro, on the other hand, increased to 87.71 pence on Friday, its highest level since February 2021, while the pound has notably suffered. At 87.45 pence, it was recently up 0.39 percent.

A severe depreciation of the pound resulted from Britain’s exit from the Exchange Rate Mechanism, a mechanism created to lessen currency swings prior to the introduction of the euro, on September 16, 1992.

Sterling dropped 4.3% on that day, now known as Black Wednesday, and ended the day at $1.778, which is significantly more than it is presently.

The statistics that led to Friday’s decline indicated that retail sales volumes fell 1.6% in monthly terms in August, which was worse than all of the projections in a Reuters survey of experts, who had called for a 0.5% decline. This was the worst loss since December 2021.

The International Monetary Fund predicts that the British economy will see weaker economic growth and more persistent inflation than any other major country in 2019.

According to John Hardy, director of FX strategy at Saxobank, “the grinding backdrop of everything that’s going on is pushing on sterling, with the UK running these big external deficits and the concerns around the incoming prime minister’s plans contributing to that.”

To lessen the economic blow of the war in Ukraine, Britain’s new leader, Liz Truss, proposed last week a two-year ceiling on consumer energy prices. The measures are expected to cost the nation upwards of 100 billion pounds ($115 billion).

On September 23, British Finance Minister Kwasi Kwarteng is anticipated to present a fiscal statement outlining how this will be paid for as well as how he would carry out the tax cuts Truss pledged during her run for the Conservative Party leadership.

Additionally, markets are “risk-off” as a result of FedEx pulling their prediction and a decline in U.S. stocks below a crucial support level. Sterling is equivalent to a worse euro in a risk-off atmosphere, according to Foley.

On Thursday, FedEx Corp cancelled the financial projection it had made just three months prior, sending its shares tumbling and straining the market as a whole.

A jam-packed week of central bank meetings will include the Bank of England’s meeting the following week. Market pricing suggests that a 75-basis-point increase has a little higher probability than a 50-basis-point increase.

There is definitely a danger that a 50bp boost will spark further GBP selling, according to MUFG, given that the (European Central Bank) increased rates by 75bps, the Bank of Canada did the same, the Fed will follow suit, and potentially the (Swiss National Bank).

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GPCCI Calls For Lifting The Import Prohibition On Automobiles

August 10, 2022 / By Zunair Tahir / Business News

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For a fresh GSP+ application, Pakistan needs German political and diplomatic backing

The German Pakistan Chamber of Commerce and Industry (GPCCI) has urged the Pakistani government to immediately reverse the import restriction on automobiles after warning that it might negatively affect impending GSP+ discussions with the European Union (EU).

Syed Nadeem Ali Kazmi, president of the German Pakistan Chamber of Commerce and Industry, wrote a letter to finance minister Miftah Ismail warning that the impending GSP+ negotiations with the EU may suffer as a result of the ban on imports of vehicles (CBU) from Germany.

German cars in CBU form are included in the list of imports that are prohibited by the coalition government.

UAE To Spend $1 Billion In PSX, Claims Miftah Ismail

August 6, 2022 / By Zunair Tahir / Business News

**Finance Minister Miftah Ismail addresses a press conference in Karachi on August 6**

Finance Minister Miftah Ismail announced on Saturday that the United Arab Emirates (UAE) has invested in the nation’s stock exchange in an effort to strengthen bilateral economic ties.

The UAE previously announced its willingness to invest $1 billion in Pakistani businesses across a range of economic and investment sectors. The action is intended to seek new investment possibilities and areas for collaboration in projects across multiple industries in order to strengthen bilateral economic relationships in the best interests of the two nations, according to the Emirates News Agency.

“Problems will continue to prevail until September,” says Miftah Ismail

Miftah Ismail stated during a news conference in Karachi that the national economy requires the importation of luxury goods to be prohibited for the foreseeable future.

He insisted that wise government policies are driving the country’s economy in the right direction, and that efforts are being done to stabilize it.

Meteoric Dollar Smashes All Records & Reaches Rs200 In The Interbank Market

May 19, 2022 / By Zunair Tahir / Business News

US dollar hit Rs200 in interbank trade on Thursday morning, up Rs1 from the previous day’s closing of Rs199, according to statistics from the Forex Association of Pakistan (FAP).

Around 11 a.m., the US dollar hit an all-time high of Rs200, according to the FAP.

The greenback had made a huge gain of more than Rs2 from Tuesday’s close and closed at Rs199 at the end of the session, the latest in a succession of new highs for the US currency since last Tuesday.

While the FAP reported the previous day’s closing rate as Rs199, the State Bank of Pakistan reported the rate as Rs198.39, which is still close to the Rs200 mark that the international currency is expected to reach earlier in the day due to the country’s rising import bill, growing current account deficit, and depleting foreign exchange reserves.

In the open market yesterday, the dollar had already touched Rs200.

‘The Darkest Day’

Some analysts are upset with the achievement. FAP Secretary General Zafar Paracha told Dawn.com that today was the “blackest day” in Pakistan’s history due to the current currency rate.

In a statement to Dawn.com, FAP chairperson Malik Bostan requested the Federal Board of Revenue (FBR) to issue statutory regulatory instructions for the execution of import restrictions.
Meanwhile, Asad Rizvi, a former Chase Manhattan treasury chief, told Mettis Global, a web-based financial data and analytics portal, that “pension costs, circular debt [of] Rs2.5 trillion, public entities [worth] Rs1.2 trillion, and fiscal deficit of nearly 8% are not sustainable and adding pressure” on the rupee.

Meanwhile, the “independent SBP” was “not bothered by the PKR collapse, perhaps waiting for [an] IMF decision,” according to the Mettis Global report.

Rising oil prices have already increased the country’s oil import expenses in recent weeks, and overall imports are also at an all-time high. Imports soared by 72 percent in April, leaving the government with no room to repair its external balance.

Furthermore, the central bank’s foreign exchange reserves have dropped to $10.3 billion, the lowest level since June 2020.

Currency traders believe the unexpectedly large import bill and little foreign investment were not supportive of the currency rate, while the government already faced a $13 billion current account deficit.

The news comes after Pakistani officials resumed talks with the International Monetary Fund (IMF) yesterday, in which Finance Minister Miftah Ismail sought to dispel doubts on two fronts: that the new coalition government would stay in power and take tough decisions, as well as that the original fund program’s reforms would be implemented and structural benchmarks would be met.

According to informed sources, the negotiations began on a positive note, with both parties agreeing on important concepts such as separating the state’s economic decision-making from politics.

According to these sources, the government would revise gasoline and energy prices within days and implement a complete ban, rather than increase tariffs, on a total of approximately 30 luxury products, including cars and cellphones, as well as some smaller things, to limit imports and therefore external accounts. These announcements will be made soon in order to forward discussions toward a satisfactory conclusion of the revised program.

Pakistan Is Expected To Increase The Price Of Electricity By PKR3.15 Per Unit

April 20, 2022 / By Zunair Tahir / Business News

ISLAMABAD, Pakistan – The National Electric Power Regulatory Authority (NEPRA) has received a petition demanding a Rs3.15 per unit rise in power prices in March 2022 due to changes in fuel prices.

The application was sent by the Central Power Purchasing Agency (CPPA), and it will be heard by Nepra on April 27. If the raise is accepted, the public would be saddled with a Rs30 billion charge.

According to the CPA’s appeal, a total of 10 billion units were produced in March at a cost of Rs94 billion.

On April 21, Pakistani Internet Users Will Experience Slow Speeds

In March, the CPPA notified the regulatory body that the per unit cost of power generated from thermal oil was Rs22.52, while the cost of energy generated from LNG was Rs14.36.

According to the electricity regulatory, the ruling will have no impact on K-Electric customers.

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(IMF) Has Expressed Concern Over Pakistan’s Growing Inflation and Expanding Current Account Deficit

April 20, 2022 / By Zunair Tahir / Business News

ISLAMABAD, Pakistan – Pakistan’s surging inflation and expanding current account deficit have alarmed the International Monetary Fund (IMF).

According to a recent assessment by the Washington-based banking organization, the South Asian country’s productivity is on the decline.

Inflation is expected to stay around 11.2 percent this year, with the current account deficit hovering at 3.5 percent of GDP.

According to the estimate, economic growth will be about 4% this year, while unemployment will be around 7% this year and 6.7 percent next year.

On April 21, Pakistani Internet Users Will Experience Slow Speeds

Meanwhile, in the aftermath of the crisis in Ukraine, the UN has cut its global growth estimates, warning that a Kremlin invasion may break the global economy into opposing blocs.

It noted that prospects had deteriorated in the previous three months, as it decreased its growth forecast for 2022 from 4.4 percent to 3.6 percent. The news comes as Islamabad has formally begun discussions with the IMF on the bailout package in Washington. According to sources, negotiations with the US-based financial institution will last until April 24, and the IMF will disburse a $1 billion tranche following successful talks.

Governor of the State Bank of Pakistan, Reza Baqar, is now in the United States for discussions with IMF officials. He will also be present at the World Bank’s steering committee meeting. Miftah Ismail, the Prime Minister’s Finance Adviser, will participate in the IMF negotiations electronically.

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PM Shehbaz Urges The Energy Industry To Take Action To Decrease Circular Debt

$1.5 Billion ADB Loan Agreement, PKR Increases By 68 Paisa versus The Dollar

READ MORE:The Rupee’s Comeback Is It Only Temporary?

The Rupee’s Comeback Is It Only Temporary?

Rupee Rises Rs1.7 Versus The Dollar In Interbank Trading As The Uptrend Continues

READ MORE: At Jallo, PHA Reopens The Butterfly House

UK Pound Drops To 37-Year Low

GPCCI Calls For Lifting The Import Prohibition On Automobiles

For a fresh GSP+ application, Pakistan needs German political and diplomatic backing

READ MORE: UAE To Spend $1 Billion In PSX, Claims Miftah Ismail

UAE To Spend $1 Billion In PSX, Claims Miftah Ismail

“Problems will continue to prevail until September,” says Miftah Ismail

READ MORE: Banks Will Be Closed On August 8 and 9 For Muharram In 2022

READ MORE: In Three References, ECP Summons Imran Khan

Meteoric Dollar Smashes All Records & Reaches Rs200 In The Interbank Market

US dollar hit Rs200 in interbank trade on Thursday morning, up Rs1 from the previous day’s closing of Rs199, according to statistics from the Forex Association of Pakistan (FAP).

‘The Darkest Day’

Pakistan Is Expected To Increase The Price Of Electricity By PKR3.15 Per Unit

(IMF) Has Expressed Concern Over Pakistan’s Growing Inflation and Expanding Current Account Deficit

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