Business

Rupee closes at record low of 239.65 against dollar

Published

2 years ago

Farwa

Pakistani rupee plunges to 239.65 after losing 0.74.
Rupee registers losses for 14th consecutive session.
Dollar was at an all-time high of 239.94 on July 28, 2022.

KARACHI: The Pakistani rupee continued to fall for the 14th consecutive session on Wednesday and hit a record historic low against the US dollar, with analysts expecting further depreciation of the local unit.

The rupee has been one of the worst performing currencies in the emerging markets and has fallen by nearly 9% so far this month owing to wide-ranging factors.

In the interbank market, the rupee plunged to 239.65 after losing 0.74, according to the data from the State Bank of Pakistan (SBP), down in value from the previous session’s close of 238.91.

The dollar now stands only Rs0.29 short of the all-time high level of Rs239.94 on July 28, 2022.

The heavy flooding and the lifting of a ban on imports have created pressure on the local unit, but the country is looking toward aid from friendly countries and multilateral and bilateral institutions to overcome the persisting economic crisis.

Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people — creating concern that Pakistan will not meet its debts.

Pakistan was able to resume the International Monetary Fund’s programme (IMF) and get a $3 billion rollover from Saudi Arabia, but the unprecedented floods have overshadowed everything else and led to a hit of at least $18 billion to the economy, which could go as high as $30 billion.

Samiullah Tariq, the head of research at Pak-Kuwait Investment Company, said: “[There’s] a greater demand than supply; floods have added to the import bill; aid hasn’t arrived in cash yet, but once it does, the liquidity position will ease.”

A weakening currency may worsen the price pressures after inflation surged to the highest in almost five decades. The nation is also grappling with the aftermath of a series of deadly floods and needs additional funds beyond the IMF’s $1.1 billion loan to avert a default.

The advent of floods and their negative effects on the country’s external account are to blame for the recent slide in the currency.

The loss of crops will now have to be made up for through imports and weak external flows, which have remained low since the signing of the IMF deal.

The $1.1 billion IMF loan tranche did help Pakistan improve sentiment, saving the country from default. However, additional inflows from the Middle East nations were anticipated to follow.

These inflows have not arrived yet, according to analysts.

In the past several months, investments and loans totalling $9 billion from Saudi Arabia, the United Arab Emirates, and Qatar have been promised to Pakistan.

While Saudi Arabia has already extended a $3 billion deposit that was due in December as part of that help for one year, the three countries have not yet distributed any new investments and have not provided a timeline for when they intend to do so.

The government is worried about a free fall of the rupee and is considering some steps to stabilise the foreign exchange market. Recently, the State Bank of Pakistan issued a show-cause notice to eight banks for selling dollars at prices higher than the current market rate, Finance Minister Miftah Ismail revealed over the weekend, to stop the rupee’s wild decline.

“The IMF loan was more to do with sentiment and was expected to be followed by inflows from other friendly countries,” said Sana Tawfik, economist at Arif Habib Ltd. in Karachi.

“These things were to materialize, but we don’t see any inflows yet.”

Business

Pakistan’s lunar mission ‘ICUBE-Q’ reaches the moon orbit.

Published

13 hours ago

Farwa

Pakistan’s lunar mission (ICUBE-Q) entered orbit around the moon on Wednesday.

Pakistan’s historic lunar mission (ICUBE-Q) launched from Hainan, China, on Friday aboard China’s Chang’E6 spacecraft.

According to the IST, the satellite ICUBE-Q was planned and developed in partnership with China’s Shanghai University SJTU and Pakistan’s national space agency SUPARCO.

The ICUBE-Q orbiter is equipped with two optical cameras to image the lunar surface. ICUBE-Q has now been integrated into the Chang’e6 mission after successfully qualifying and testing it.

Chang’e6 is the sixth lunar exploration mission launched by China.

The launch event was streamed live on the IST website and social media platforms. Chang’6, China’s Lunar Mission, will land on the Moon’s far side to collect surface samples before returning to Earth for further research.

Business

The FIA and KE have launched 13 successful operations against power theft.

Published

13 hours ago

Farwa

In March 2024, operations were performed in collaboration with the FIA, targeting locations such as Marora Goth, Peer Abad, Ellahi Colony Metroville, Merchant Navy Housing Society, Johar Colony, Willayatabad, and Architects Society, among others. As a result of these collaborative efforts, six FIRs regarding power theft have been filed. Furthermore, four people were caught, with three being remanded to jail and one being released after paying the fines. To enforce governance and maintain accountability, a total fine of PKR 44.33 million was issued. Additionally, in partnership with FIA Balochistan, KE has conducted anti-theft operations in Hub, where teams from KE and FIA thoroughly investigated places including as markets, retail plazas, residential and commercial properties.

Regular actions against illicit power use are part of KE’s everyday activities to prevent line losses and protect the safety and security of the electrical infrastructure. Since the start of the fiscal year (FY 2023-24), over 24,000 kunda removal drives have been performed, resulting in the elimination of over 190,000 unlawful connections and the recovery of over 260,000 kgs of illegal kunda wires.
Ongoing raids involving law enforcement personnel and other agencies have resulted in the registration of around 994 FIRs against various individuals throughout Karachi. Since the launch of the nationwide power theft campaign in September 2023, more over 100,000 incidences of theft of 180 million units of electrical power have been identified in KE’s service zone.

In response to KE’s anti-theft initiatives, a KE spokesperson stated that “71% of KE’s feeder network is loadshed-free. However, 29% of the KE network remains difficult, with electricity theft and nonpayment of bills still key issues. Serious theft cases have been found in Baldia, Surjani, Korangi, Orangi, Liaqatabad, Landhi, and Lyari, among other places. Highlighting the repercussions of electricity theft, which may jeopardize the safety standards of the power network, the KE Spokesperson noted that PKR 117 million has been recovered.

Recognizing the challenges faced by current macroeconomic conditions, especially high inflation, KE is taking proactive steps to assist customers by establishing facilitation camps throughout the city. Since July 2023, approximately 240 recovery camps have been hosted around KE’s operational zone to help customers resolve billing concerns, including supporting payment plans with manageable installments.

Business

Budget 2024–25: The government intends to abolish tax exemptions.

Published

14 hours ago

Farwa

According to the specifics, the federal government plans to phase out existing tax breaks for the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) regions in the upcoming fiscal year.

The decision to eliminate tax breaks in the FATA/PATA region is estimated to produce Rs 100 billion in annual revenue for the national government.

According to sources close to the issue, the Federal Bureau of Revenue (FBR) has already created a preliminary proposal for the next fiscal year’s budget, and the FBR head has also informed the finance minister on it.

Currently, the federal government provides tax breaks of Rs 1,200 billion to various industries; however, the IMF has instructed Pakistan to phase out these tax breaks in the next budget.

Pakistan’s president, Asif Ali Zardari, passed the Tax Laws (Amendment) Bill 2024 last week in accordance with Article 75 of the constitution.

According to a President House News release, the bill proposes amending legislation governing taxes and duties.

The bill’s revisions include changes to sections 30DDD, 43, 45B, 46, and 47 of the Sales Tax Act of 1990.

Similarly, the amendment bill amended sections 29, 33, 34, and 38 of the Federal Excise Act 2005, as well as sections 122A, 124, 126A, 130, 131, 132, 133, and 134A of the Income Tax Ordinance 2001.