Business

Pakistan to finalise IMF deal next month: Miftah Ismail

Published

2 years ago

Farwa

Miftah Ismail says requested IMF to provide $2 billion additional funds.
Country expects around $5 billion from Fund, finance minister says.
Households not registered with BISP can message CNIC on 786, he says.

ISLAMABAD: Finance Minister Miftah Ismail assured Saturday the government would reach the staff-level agreement with the International Monetary Fund (IMF) by next month — June.

Hopes of the IMF programme’s revival rose Thursday after the federal government decided to raise the price of petroleum products by Rs30 as the Fund did not resume the programme due to the subsidies provided on oil and power.

Miftah, addressing a press conference alongside Minister of State for Finance Ayesha Ghous Pasha, said the funds — under the Extended Fund Facility (EFF) — would be released after final approval by the IMF board.

The minister said that Pakistan has requested the Fund — which has to provide $3 billion — to extend the program by one year and provide an additional $2 billion.

If the international money lender agrees to provide Pakistan with the additional amount, the country expects around $5 billion from the Fund, the finance minister said.

He said that the IMF programme was important not just because the country gets money from the Fund, but it plays an important role in opening ways for getting additional funds from other multilateral organisations — like World Bank and Asian Development Bank.

The finance minister said once the Fund releases the latest tranche, Pakistan would get money from multilateral organisations, noting that around $8.9 billion were already in pipeline from World Bank.

Minister defends petrol price hike

The minister justified the increase in petrol prices, saying that no doubt it would increase inflation, but if the hike had not been done, it would lead to sky-rocketing inflation as the burden would fall on the government and resultantly, it would devaluation of rupee further.

He said after increasing the prices of petrol, not only rupee was strengthened against the dollar by around 2.5, but the stock market also moved positively.

The minister said the government intended to provide relief to the poor against the inflationary pressure, which was created due to the “incompetency” of the previous government.

He said the government would try its best to provide maximum relief to the poor of the country.

He added that Saudi Arabia has already announced the extension of its $3 billion deposits to Pakistan and hinted that some more support was expected from that country the details of which would be shared in July.

The relief programme’s details

Giving details about the PM’s relief package, the minister said that the ‘Sasta Petrol and Sasta Diesel’ scheme would benefit around one-third population of the country by providing cash to 14 million households (84 million people).

Disbursement of Rs2,000 to each household would start from June, bringing the total relief amount to Rs28 billion in June. He said around 7.3 million recipients were already registered with Benazir Income Support Program (BISP).

He said the BISP participants would be provided immediate relief or Rs2,000, whereas women heads of those households who are not registered should message their CNIC on 786 for registration for the program.

The finance minister shared that households having an income of less than Rs40,000 would be eligible for the relief. He said the relief scheme would be incorporated into the federal budget for the fiscal year 2022-23.

To a question on privatisation, the minister said there was no talk on privatisation with IMF this time.

However, he added, the country needed to privatise certain entities, including Discos and power companies for its own interest to reduce the burden on the national exchequer.

Business

Exchange achieves all-time high: KSE-100 index surpasses 72,500 points

Published

7 hours ago

Farwa

With the benchmark KSE-100 index hitting a record-breaking high of 72,501 points, the Karachi Stock Exchange saw yet another incredible rise.

Within Pakistan’s financial environment, investors demonstrated a strong sense of trust in the market as the bullish trend continued.

As a result of the significant inflow of investment and optimism among market players, the index had an amazing 450-point rise during the trading session.

In their analysis of the market’s remarkable performance, financial analysts pointed to a number of causes for the upward trend, such as encouraging economic data, robust company profits, and the government’s proactive measures to promote economic expansion.

The durability and upward momentum of the market have also been greatly aided by continuous infrastructural investments and efforts meant to boost investor confidence.

In the meantime, interbank rates increased by six paisas, and the US dollar’s value saw a slight rise in the currency market. As a result of the current market conditions and the dynamic nature of foreign exchange swings, the dollar was quoted at Rs 278.45 in the interbank market.

Business

The investment plan for K-Electric will be audited every three months.

Published

8 hours ago

Farwa

In light of K-Electric’s inability to persuade NEPRA with its Rs. 484 billion investment plan, the regulatory body has decided to hold off on making changes to the utility’s Transmission & Distribution Investment Plan until FY 2030.

As stated in the order, the NEPRA will select the terms of reference (ToR) for the third-party audit in addition to announcing the quarterly audit. A report on the company’s investment plan’s progress will need to be submitted every quarter.

A performance report would also be required under the investment plan by K-Electric, Karachi’s only power distribution utility, according to the statement. A secure mechanism to avoid electrical mishaps was also mandated by the authority to the utility.

In the meantime, the power distribution firm stated in a statement that the investment plan will boost the utility’s infrastructure to meet present and future demands, decrease transmission and distribution losses, and increase customer base growth.

With investments totaling Rs. 544 billion, KE has been able to more than halve its T&D losses and quadruple its customer base and power consumption since privatisation, according to the statement.

A hearing in March 2023 was held to inform stakeholders about the projects that KE management had planned for FY2024–FY2030, and the statement claimed that the plan had been presented in compliance with regulatory requirements.

In terms of investment areas including expansion, energy loss reduction, network rehabilitation, maintenance, and safety, KE claimed to have clearly defined priorities and projects for this era.

The plan calls for the construction of transmission lines and grids, which will increase the dependability of KE’s network and make it possible to take on more electricity from the National Grid.

In order to manage the city’s needs through targeted investments and tech-based interventions, CEO KE Moonis Alvi said, “We are looking to invest $2 billion in Transmission and Distribution over the next 7 years.” The work of all the stakeholders who have contributed to this trip and who will help us modernise our infrastructure and get ready for the future is something I’d like to acknowledge.

The investment plan is a supplement to the business’s Power Acquisition Programme, which outlines KE’s goal of having 30% renewable energy in its generation mix by 2030. As part of its efforts to provide everyone with access to reasonably priced energy, the firm has also been granted regulatory permission for its RFPs for 640 MW of renewable projects.

Business

$399 million in airline revenue is being blocked by Pakistan. IATA

Published

8 hours ago

Farwa

Pakistan and Bangladesh have been urged by the International Air Transport Association (IATA) to promptly release airline profits that are being withheld in violation of international agreements.

“Airlines are unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets, resulting in a severe situation,” an IATA statement stated.

“Money-denominated expenses like lease agreements, spare parts, overflight fees, and fuel must be paid for in a timely manner by repatriating revenues to their home countries.”

Delaying repatriation raises exchange rate risks for airlines and violates bilateral agreements’ international commitments. In order for airlines to effectively continue to offer the aviation connectivity that both of these countries depend on, Pakistan and Bangladesh must immediately release the more than $720 million that they are blocking, according to Philip Goh, Regional Vice President for Asia-Pacific at IATA.

Pakistan needs to make the difficult repatriation procedure less complicated. According to the statement, this presently includes the need to present audit certifications and tax exemption certificates, both of which create needless delays.

Approximately 425,000 jobs and $2.8 billion in economic activity were supported by Pakistan’s aviation industry prior to COVID-19. Passenger numbers are predicted to increase by more than 2.5 times by 2040 after returning to pre-COVID levels in 2023, according to the statement.