Business Observer

Federal Minister of National Food Security Syed Fakhar Imam conducted a high level meeting with the provincial counterparts to monitor the ongoing sowing of wheat in the country.

The meeting attended by representatives from all provinces, including Punjab agriculture minister Hussain Jahania Gardezi was conducted to ensure that every province is on track to meet the assigned wheat targets.

The Minister was briefed that Punjab stood at 51% sowing, Sindh at 42% whereas Khyber Pakhtunkhwa (KPK) and Balochistan at 40%.

Imam discussed the outstanding issues that the provincial agriculture departments are facing in order to meet the assigned targets. The minister was briefed that the Certified Seed of wheat is sufficiently available with all provinces. The minister said that it is imperative that a track and trace system is established to ensure maximum productivity of wheat in the country.

Imam was told that Punjab is facing a shortage of fertilizer. Imam ensured the participants that necessary steps will be taken to ensure that the factors of production are available in ample supply.

He also praised the efforts of Punjab agriculture minister Hussain Jahania Gardezi in ensuring timely sowing of wheat. Gardezi briefed Fakhar Imam that the government of Punjab conducted numerous seminars to create awareness in addition to partnering with five agricultural universities of Punjab to mobilize agricultural students in ensuring proper sowing of wheat seeds.

Source: Pro Pakistani

Pakistan’s current account recorded the highest deficit of $1.66 billion during the current financial year 2021-22 in October 2021 according to the statistics released by the State Bank of Pakistan (SBP) on Friday.

The current account deficit surged to $1.66 billion in October 2021 from $1.13 billion in September 2021 due to high energy prices and an uptick in services imports, despite some moderation in nonenergy imports.

Overall, the current account deficit stood at $5.08 billion from July to October 2021 as against the current account surplus of $1.33 billion reported in the same period the last year.

Economic Analyst A.A.H Soomro told ProPakistani,

The current Account is heating up despite depreciation & various demand-reducing measures by SBP & the govt. These levels are not sustainable amid rising demand growth & stubborn food & energy prices. It’s time for curb the demand & protect the precious dollars.

The trade deficit also surged to an alarming $14.8 billion at the end of October, widening by 97% percent from $7.51 billion in the same period of last fiscal year.

Remittances, on the other hand, posted double-digit growth of 11.9% year-on-year recording inflows of $11.5 billion.

The current account deficit is heating up despite depreciation and various demand-reducing measures by SBP and the government.

The government and the banking regulator imposed strict measures to contain the imports of the goods and commodities which are considered as non-essential. The impact could be further visible gradually in the coming months.

The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) on Friday raised the policy rate by 150 basis points to 8.75 percent from 7.25 percent.

The State Bank of Pakistani in the latest MPC Statement stated that “In Pakistan too, high import prices have contributed to higher-than-expected CPI, SPI, and core inflation outturns. At the same time, there are also emerging signs of demand-side pressures on inflation, and inflation expectations of businesses have risen on account of further upside risks from domestic administered prices.”

“With respect to the balance of payments, the current account deficits in September and October have been larger than anticipated, reflecting both rising oil and commodity prices and buoyant domestic demand. The burden of adjusting to these external pressures has largely fallen on the rupee”, the bank added.

Source: Pro Pakistani

Prime Minister Imran Khan has said that the government is providing subsidies and incentivizing the construction industry to help the low-income segment of the society.

The premier was speaking at a ceremony during his visit to the site of 4400 under-construction houses under the Naya Pakistan Housing Project at Farash Town, in the suburbs of Islamabad.

“No government in the past cared for the low-income segment of the society, who had no shelter,” the Prime Minister said after visiting the construction site.

Imran Khan regretted that the previous governments did not pay heed to the basic needs of people including affordable housing. He said the banks were asked to provide mortgages to the people to help them construct a house of their choice.

The Prime Minister said the government offered exemption on taxes to the construction sector and despite the negative impact of Covid-19 all over the world, Pakistan was one of the few countries that kept its construction sector open and people had an opportunity to earn their livelihood.

With regards to Farash Town Apartments, the premier said that of the total 4400 apartments, 2000 houses have been reserved for low-income groups registered under the Naya Pakistan Housing, 400 are for slum dwellers and 2000 for middle income and salaried class people.

Source: Pro Pakistani

The Pakistani Rupee (PKR) continued its extremely volatile and bearish run against the US Dollar (USD) for another day after it depreciated by 56 paisas against the greenback in the inter-bank market today. It hit an intra-day low of Rs. 175.5 against the USD during today’s open market session.

The local currency depreciated by 0.33 percent against the latter and closed at Rs. 175.24 today after it posted losses of 91 paisas and closed at Rs. 174.67 in the inter-bank market on Thursday, 18 November.

The local currency has surpassed its former record low against the USD from 26 October when it closed at Rs. 175.27, and is only a touching distance away from its all-time low of Rs. 175.73 from 12 November.

The Rupee has lost 0.28 percent against the dollar on a Week-on-Week basis, and 2.09 percent and 9.64 percent on Month-to-Date and Year-to-Date bases respectively, according to Capital Stake.

Rupee Spillover

The current account deficit widened from $1.13 billion in September to $1.66 billion in October during the ongoing fiscal year on the back of a moderate decline in exports and remittances and some uptick in services imports, according to the State Bank of Pakistan. Additionally, high energy prices kept the import bill elevated despite a downtick in non-energy imports.

Economic analyst A. A. H. Soomro told ProPakistani,

Current Account is heating up despite depreciation and various demand-reducing measures by SBP and the government. These levels are not sustainable amid rising demand growth and stubborn food and energy prices. It’s time to curb the demand and protect the precious dollars.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, discussed the Rupee’s interbank showing in a tweet earlier today. He said, “Yesterday, SBP called BANK HEADS & told them to avoid unnecessary buying of $ or breach limit. Banks R told 2avoid guiding importers or tell them to buy $ vs #PKR until it stabilizes.”

He added, “While, Net SBP FX RESERVES is down by $380mn. Market is likely to remain choppy”.

The PKR failed to post gains against the other major currencies as well and posted losses in the inter-bank currency market today.

It lost 44 paisas against the Canadian Dollar (CAD), 18 paisas against the Australian Dollar (AUD), and 15 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR).

The Rupee continued its decrepit sway against the resurgent Euro (EUR) after it posted losses of 40 paisas against the eurozone currency. It also posted losses of 13 paisas against the Malaysian Ringgit (MYR) and eight paisas against the Chinese Yuan (CNY).

Surprisingly, it managed to post gains of 10 paisas against the Pound Sterling (GBP) in the inter-bank currency market today.

Source: Pro Pakistani

The Rawalpindi Chamber of Commerce & Industry (RCCI) on Friday expressed strong reservations over an increase of 150 basis points in the interest rate by the State Bank of Pakistan, taking it from 7.25 percent to 8.75 percent.

In a statement, President RCCI Nadeem Rauf urged the government to withdraw the hike as it would increase the credit cost of commercial banks, ultimately casting a bad impact on the growth of industrial activities and creating more hardships for the Small and Medium Enterprise (SME).

He said the central bank raised its interest rate by a sharp 150 basis points in one go which would discourage the investors considering Pakistan for investment.

Nadeem Rauf said Pakistan needed a quick revival of business and industrial activities to improve the economy which was badly hit by COVID-19. He underlined that the increased interest rate would make the cost of credit unaffordable for the business community.

The RCCI chief observed that the government was already facing pressure on the fiscal deficit. He said the increase in interest rate would heighten the budget deficit. He urged Advisor on Finance Shaukat Tarin to review the SBP announcement and hold a meeting with the business leaders to discuss and devise a new strategy to strengthen the economy.

Source: Pro Pakistani

Ministry of Economic Affairs and Pakistan Institute of Development Economics have signed an MoU for enhancing collaboration in the field of research and public policy analysis.

Secretary Ministry of Economic Affairs witnessed the signing of MoU between the Ministry of Economic Affairs and PIDE Islamabad. The MoU was signed by Zulfiqar Haider, Additional Secretary, EAD, and Vice-Chancellor PIDE, Dr. Nadeem-ul-Haq.

Secretary, EAD, and Vice-Chancellor PIDE, Dr. Nadeem-ul-Haq acknowledged the importance of developing linkages of Academia in the policy-making process and the need for a comprehensive analysis of Foreign Economic Assistance in Pakistan. By signing the MoU, both sides are agreed to promote collaboration in the field of research and public policy analysis with a particular focus on foreign aid and its effectiveness.

In collaboration with the EAD, the ‘Foreign Aid Effectiveness Unit’ will be established in PIDE. The Unit will conduct research on topics related to foreign economic and technical assistance to Pakistan. It will examine the economics of Foreign Economic Assistance by exploring the role of International Finance Institutions, debt management, aid volatility, and their consequences for Pakistan’s economy. It will help the Ministry of Economic Affairs in evidence-based decision-making and set development priorities for short, medium, and long-term commitments.

Secretary Economic Affairs and Vice-Chancellor PIDE agreed to maintain regular and reasonable contact and engage in discussions, events, and conferences regarding research areas pertaining to this MoU.

Source: Pro Pakistani