Business

Dollar weakens after govt’s warning to reign in currency speculation

Published

2 years ago

Farwa

Rupee gains against dollar for sixth consecutive session.
Rupee appreciates by Rs1.62 to reach 228.45 per dollar.
Expectation of Pakistan receiving flood relief also driving factor.

KARACHI: The government’s warning to reign in currency speculation again pushed down the US dollar’s slide against the Pakistani rupee for the sixth consecutive session on Friday.

In the interbank market, the local unit appreciated by Rs1.18 to reach 228.45 per dollar, according to the State Bank of Pakistan up from the previous session’s close of 229.63.

Right after taking charge of the finance ministry earlier this week, Senator Ishaq Dar said that no one would be permitted to manipulate the foreign exchange market.

The new finance czar — who has strongly favored intervention in currency markets in three previous stints in the job — also claims that the value of the local unit is undervalued and he will seek to control inflation by lowering the interest rates.

The warning seems effective as market participants told The News that currency speculation appears to have decreased and the rupee is now gaining ground as a result of this.

Muhammad Saad Ali, a capital market expert, told Geo.tv that it was indeed Dar’s warning of reigning in speculation in the currency market that was driving the dollar’s free fall.

But the depreciation was not limited to the warning as Pakistan is also set to receive external financial assistance in terms of flood relief, which will in turn support the exchange rate, Ali said.

Although the currency has been witnessing appreciation against the greenback, Pakistan’s exports are still not at an ideal position and it is feared that in the coming days, the country will have to import commodities as a result of floods — shrinking the forex reserves.

The floods have also raised questions on whether Pakistan will be able to pay its debts on time, with the local currency not at a desirable stage against the dollar and the forex reserves diminishing over time.

In this regard, Prime Minister Shehbaz Sharif and Foreign Minister Bilawal Bhutto-Zardari have sought climate justice to compensate for the destruction as the disaster was climate-induced — and Pakistan produces one of the lowest carbon emissions in the world.

In line with the dominant trend over the last several weeks, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) once again declined by 4.07%.

On September 23, the foreign currency reserves held by the SBP were recorded at $8,005.9 million, down $341 million compared with $8,346.4 on September 16, data released by SBP showed on Thursday.

Business

FBR Reforms: PM Leading Reforms Process with Law Minister as Top Priority

Published

8 hours ago

Farwa

According to Federal Law Minister Azam Nazir Tarar, Prime Minister Shehbaz is leading the entire reform process, and the Federal Government has made the reforms at the Federal Board of Revenue its top priority.

According to the law minister, who was speaking at a press conference in Islamabad, there are presently one billion rupees worth of tax cases pending in court. The parliament has for the first time passed legislation on tax tribunals in an effort to streamline and accelerate the legal process.

He stated that, strictly according to merit, there have already been a few postings and transfers in the FBR and that more are anticipated in the next few days.

Federal Information Minister Atta Tarar, who accompanied the Law Minister, stated that Prime Minister Shehbaz Sharif is spearheading an effective foreign policy through productive meetings with world leaders.

He declared the premier’s trip to Saudi Arabia, where Shehbaz Sharif met with government representatives and corporate executives who indicated interest in investing in Pakistan, a success.

Atta Tarar also declared that a commercial team from Saudi Arabia would be visiting soon.

Business

Pakistan will host an IMF team in May to discuss a new loan.

Published

8 hours ago

Farwa

According to sources, negotiations on a fresh loan program have been set between Pakistan and the foreign lender. There will be two stages to the meetings: technical discussions and policy-level conversations.

Prior to the upcoming negotiations, Pakistan must overcome formidable economic obstacles, including the collapse of an IMF-proposed tax amnesty program.

Although it hasn’t worked, the federal government had promised to include 3.1 million merchants in the scheme’s tax net. The recent turnover of senior officials has placed the Federal Board of Revenue (FBR) in an atypical position.

The negotiation process with the IMF will be difficult for the new and inexperienced FBR team. The significant drop in FBR’s tax collections would likely worry the IMF.

A day prior, Pakistan obtained the eagerly awaited $1.1 billion last installment from the IMF as a component of the $3 billion standby agreement.

Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

Finance Minister Muhammad Aurangzeb stated Islamabad might obtain a staff-level agreement on the new program by early July. Pakistan is seeking a new, longer-term, and larger IMF loan.

Although Aurangzeb has neglected to specify the specific program in question, Islamabad has stated that it is seeking a loan for a minimum of three years in order to support macroeconomic stability and carry out long-overdue and difficult structural reforms. Should it be approved, Pakistan would receive its 24th IMF bailout.

Business

In FY2024, SRB tax revenue soars to Rs 185.2 billion.

Published

9 hours ago

Farwa

In a statement released here, the SRB’s chairman, Wasif Memon, stated that he briefed Sindh Chief Minister Syed Murad Ali Shah about the organization’s revenue collections during their meeting.

In comparison, the tax collection during the same period of the previous financial year 2022–2023 stood at Rs143.3 billion. This achievement represents a 29 percent year-over-year growth, according to the Sindh Revenue Board (SRB), which recorded record revenue of Rs185.2 billion during the first nine months of the fiscal year 2023–2024.

The CM stated at the time that the SRB has shown tenacity and efficiency in revenue collection in spite of facing a number of difficulties, including the general economic downturn.

According to the statement, SRB’s monthly tax collection for April 2024 was Rs18.8 billion, a 23 percent increase from the Rs15.2 billion collected in the same month the previous year.