Pakistani rupee hits historic low as outcome of IMF talks remains uncertain

A Pakistani man counts Pakistan's rupees at his shop in Karachi on May 16, 2019. (AFP/ FILE)
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Updated 22 October 2021

Pakistani rupee hits historic low as outcome of IMF talks remains uncertain

  • Pakistan’s national currency has lost its value by Rs22 against the greenback since May 2021 due to a high import bill and Afghanistan’s situation
  • The IMF country head says the fund remains engaged with Pakistan for the completion of the sixth review of a $6 billion bailout package

KARACHI: Pakistan’s national currency on Friday closed the weekend trading session in the interbank market at Rs174, making experts attribute its continuous slide against the US dollar to the uncertain outcome of the country’s ongoing talks with the International Monetary Fund.

The Pakistani rupee has shed its value against the greenback by 14.4 percent since May 2021 when the currency was trading at about Rs152 per dollar.

While analysts previously attributed the currency depreciation to weak economic fundaments, they believe the Pakistani rupee is now losing its value further due to the continuing IMF negotiations for the completion of the sixth review of a $6 billion loan.

“Earlier, the rupee was under pressure due to the high import bill but its most recent spike is caused by the uncertainty related to the outcome of the IMF talks,” Tahir Abbas, research head at Arif Habib Limited, said. “If we cannot successfully conclude talks with the IMF, it will have an impact on our inflows. A positive outcome, however, will ease off some of the pressure that has recently built on the rupee.”

A top IMF official told Arab News on Friday her organization's negotiations with Pakistan were continuing on how to move forward the bilateral agenda.

“The IMF team remains engaged with our Pakistani counterparts on moving forward our work agenda,” Teresa Dabán Sanchez, the fund’s country head, said. “We are looking forward to our continued discussions with the Pakistani authorities on the set of policies and reforms that could form the basis for the completion of the 6th review under the EFF [Extended Fund Facility].”

The Pakistani currency has also been under pressure for the last several months due to a sharp increase in imports on the back of the country’s economic recovery amid the coronavirus pandemic.

More recently, Pakistan witnessed a significant outflow of US dollars to Afghanistan as well, after the withdrawal of the international forces from the neighboring country in August which further exerted pressure on the Pakistani rupee.

The country’s central bank governor Dr. Reza Baqir tried to highlight the positive dimension of the currency depreciation during his London visit on Monday, saying it benefited the families of overseas Pakistanis since “the volume of their hard-earned remittances are now increasing because of the exchange rate.”

His comment met with strong criticism at home from all segments of the society.

Meanwhile, currency traders said the quantum of trade in the open market had substantially declined due to the condition of biometric verification imposed by the central bank.

“The daily trade volume has declined from $2-3 million to less than half a million dollars due to the condition of biometric verification,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan, told Arab News.

Bostan said many exchange companies were not facilitated by the authorities with biometric equipment which was slowing the open market trade.

“Authorities have assured that the system will be placed by Monday or Tuesday which will enable them to monitor the trade that exceeded more than $500,” he continued.

He said the pressure on the Pakistani rupee due to the surge in demand in Afghanistan had eased off.

“The pressure arising from Afghanistan has subsided, though the import pressure on Pak rupee has continued to increase,” Bostan added.

The country’s stock market also posted losses on Friday and closed 243 points lower at 45578.36 due to the recent decision of the Financial Action Task Force to keep Pakistan under increased monitoring along with the economic uncertainty caused by the IMF negotiations.

“The stocks closed lower due to delay in the conclusion of the Pak-IMF talks and the FATF decision over status quo and retention of the country on the grey list,” Ahsan Mehanti, senior stock analyst and chief executive of Arif Habib Corporation, told Arab News. “Economic uncertainty, surging trade deficit and weakening rupee played a catalyst role in the bearish close.”


Iran reacts to Pakistani media report on its ‘support’ of Houthi attack on UAE

Updated 37 min 24 sec ago

Iran reacts to Pakistani media report on its ‘support’ of Houthi attack on UAE

  • Iranian embassy says such claims would have a ‘detrimental effect on public opinion’ on Pakistan-Iran relations
  • Houthi rebels on Monday attacked Abu Dhabi with missiles and drones, killing three people, including a Pakistani national

ISLAMABAD: The Iranian embassy in Islamabad said on Friday it denied as “baseless accusations” a report by a Pakistani newspaper that suggested Tehran had supported Yemen’s Houthi rebels in a recent carry out attacks on the UAE.
Houthi rebels on Monday attacked the Emirati capital of Abu Dhabi with missiles and drones, setting off explosions in fuel trucks that killed three people, including a Pakistani national, and injured six others.
English-language daily Dawn on Wednesday published an editorial titled “UAE targeted,” that said it was unlikely for the Houthis to develop such capabilities “without Iranian assistance.”
Reacting to the publication, the Iranian embassy issued a statement saying the newspaper had “put up negative and baseless accusations and allegations against the Islamic Republic of Iran” by accusing it of supporting the attackers “without presenting any reason or document.”
It said it “strongly denied the allegations” by the Pakistani newspaper, adding that “such claims would have a detrimental effect on public opinion toward the relations between the two countries and to overshadow the positive dimensions of relations and cooperation between the two governments for peace and durable stability in the region.”
“It is obvious that the publication of negative and untruth material is not in line with the good neighborliness and the growing trajectory of comprehensive relations between the two friendly and brotherly countries of Iran and Pakistan.”

This handout satellite image made available by Planet Labs PBC shows white fire-suppressing foam after a blaze at a fuel depot of the Abu Dhabi National Oil Company (ADNOC) in the Musaffah industrial district in the Emirati capital, on January 17, 2022. (AFP_

Dawn’s editorial team declined comment despite a request by Arab News.
The Arab coalition in Yemen has been fighting Houthi rebels, who have also repeatedly targeted Saudi Arabia with cross-border strikes.
In 2019, Houthi drone attacks on Saudi Aramco’s facilities in Abqaiq and Khurais in eastern Saudi Arabia had ignited large fires that had forced closure of both facilities and cut the kingdom’s production by nearly half.


Saudi diplomat murder: Pakistan seeks Tehran assistance to arrest suspects from Iran

Updated 7 sec ago

Saudi diplomat murder: Pakistan seeks Tehran assistance to arrest suspects from Iran

  • Hassan Al-Qahtani was killed by gunmen in Pakistan’s southern metropolis of Karachi in 2011
  • In November last year, Pakistani authorities established a special team to investigate the murder

KARACHI: Pakistani police are seeking assistance from authorities in Tehran in apprehending the suspected killers of a Saudi diplomat, who are believed to be hiding in Iran, a counterterrorism official said on Friday.
Hassan Al-Qahtani, an employee of the Saudi consulate in Pakistan’s southern metropolis of Karachi, was killed in 2011, when gunmen opened fire on his car in the city’s Defense neighborhood.
In November last year, Pakistani authorities established a special team to investigate the murder after previous probes yielded no result. Counter Terrorism Department Deputy Inspector General Omar Shahid Hamid told Arab News at the time that the team was working on “fruitful leads” from the country’s intelligence.
Investigation materials seen by Arab News include a November request to Iranian authorities for assistance in the case against three suspects in Al-Qahtani’s murder — Ali Mustehsan, Raza Imam, and Syed Waqar Ahmed — over their “involvement in target killing and terrorism activities in Pakistan.”
“We have written for mutual legal assistance from Iran,” a Counter Terrorism Department told Arab News on condition of anonymity as he was not authorized to speak to the media.
“We believe that all three accused are absconding in Iran, and we cannot arrest them without the assistance of their law enforcement.”

A Pakistani paramilitary soldier stands guard outside the Saudi consulate in Pakistan's port city of Karachi on May 11, 2011, following a grenade attack. (AFP)

He said red notices for Mustehsan and Ahmed have already been issued, while police have called for the Federal Investigation Agency to initiate the process of issuing one for Imam as well.
Imam, alias Manzar, has a 1-million-rupee ($13,400) bounty on his head and has already been sentenced to death in two different cases, according to the Sindh police wanted list. He is a member of the banned Sipah-e-Muhammad Pakistan militant organization.
Mustehsan, alias Syed Waseem Ahsan Naqvi, belongs to the same organization.


In wildlife conservation initiative, northwestern Pakistan increases number of protected areas

Updated 22 January 2022

In wildlife conservation initiative, northwestern Pakistan increases number of protected areas

  • These areas are designated to ensure conservation of flora and fauna, mitigate environmental disasters
  • Initiative comes as the UN declared years 2021 through 2030 as the Decade on Ecosystem Restoration

PESHAWAR: Pakistan’s northwestern Khyber Pakhtunkhwa province has launched a major wildlife conservation project by designating several new sites in diverse ecological zones as protected areas, a provincial minister told Arab News. 
The initiative comes as the UN has declared years 2021 through 2030 as the Decade on Ecosystem Restoration. 
Given KP’s landmass, it will collectively take the size of these special zones from 10.22 percent to 14.91 percent. 
“Our coverage of protected areas is around 15 percent but we intend to increase it to 17 percent in the coming year,” the provincial minister for forest, environment and wildlife, Syed Ishtiaq Urmar, said earlier this week. 
“I am sure we will meet our ambitious target and achieve global standards by further increasing the volume of protected areas such as wetlands, national parks and wildlife reserves.”

In this undated photo, backpackers walk past a hillside in Kamal Ban National Park, a protected area in Mansehra district of Pakistan’s Khyber Pakhtunkhwa province. (Photo courtesy: KP Forest Environment & Wildlife Department)

He said that designating appropriate sites as protected areas was helpful for the conservation of flora and fauna, adding it could ultimately reduce environmental challenges such as droughts and flooding.
According to KP’s Wildlife and Biodiversity Act, 2015, wildlife sanctuaries, national parks, biosphere reserves and game reserves all fall under protected areas. 
Pakistan is signatory to the United Nations Convention on Biological Diversity, making officials of the wildlife department say they aspire to meet international benchmarks in Khyber Pakhtunkhwa. 
“The initiative aims to preserve and rehabilitate threatened or endangered wildlife species in their natural habitats,” KP Forest Environment and Wildlife Department spokesman Latif-ur-Rehman said. “It will play a highly significant role in the protection and conservation of wildlife.” 

In this undated photo, backpackers walk past a hillside in Kamal Ban National Park, a protected area in Mansehra district of Pakistan’s Khyber Pakhtunkhwa province. (Photo courtesy: KP Forest Environment & Wildlife Department)

Dr. Muhammad Nafees, who teaches environmental sciences at the Peshawar University, told Arab News that about 12 percent of the country’s land had been declared protected by the government, though the international benchmark was 31 percent. 
He said the KP’s initiative was “encouraging,” but the whole country needed to devise a proper management plan for protected areas and infrastructure around them to “ensure effective outcomes.” 
He added that the inhabitants of these areas should also be given incentives to make the initiative successful. 
“For example, if we want to breed particular species of birds in a certain area, for instance, we will have to completely ban its hunting there,” Nafees said. “Protected areas mean that human activities should be curtailed over there to achieve long-term environmental targets and purposes.” 


Pakistan to close schools with high COVID-19 positivity for one week 

Updated 22 January 2022

Pakistan to close schools with high COVID-19 positivity for one week 

  • Health authorities will carry out massive COVID-19 testing in educational institutes in major omicron-hit cities 
  • On Friday, the South Asian nation recorded its highest daily virus cases since the beginning of the pandemic 

ISLAMABAD: Educational institutions with a high coronavirus positivity ratio would be closed for a week across Pakistan, the country’s pandemic response body announced on Friday, as the South Asian nation reported its highest daily infections since the start of the pandemic. 

Pakistan recorded 23 deaths and 7,678 new coronavirus infections in the past 24 hours, according to official figures. The country reported the previous record high number of daily cases on June 13, 2020, when 6,825 people had tested positive for the virus. 

The virus positivity ratio in the country shot up to 12.93 percent from 11.55 percent the previous day as it continues to battle an omicron-driven fifth wave of virus infections. 

Health authorities have carried out COVID-19 testing in education institutes in major omicron-hit cities to ascertain the disease spread among students and ensure accurate disease mapping. 

The data suggested a strong correlation between vaccination levels and infection rate in various cities, prompting the authorities to take different measures, including aggressive testing in educational institutes over the next two weeks. 

“Education institutions / premises / sections / specific classes with high positivity to be closed for ONE Week,” the National Command and Operation Center (NCOC), Pakistan’s top pandemic response body, said in a statement. 

“Provincial Administration in consultation with District Health, Education Authorities and School Administrations to set a threshold of cases for deciding such closures.” 

Federating units would carry out special vaccination drives in schools to ensure 100 percent vaccination of students over 12 years of age, the NCOC added. 

The rise in COVID-19 cases comes as authorities in the South Asian nation impose new restrictions to curb the fast-spreading omicron strain that is fueling the fifth wave of infections in the country. 

Earlier this week, the NCOC banned indoor gatherings and imposed restrictions on schools from January 24 in cities where the COVID-19 positivity rate was above 10 percent. 

But despite the surge, Prime Minister Imran Khan on Wednesday ruled out the possibility of a lockdown, saying Pakistan could not bring its economy to a standstill. 


Government failures led to Pakistan tourist snowstorm deaths, report says 

Updated 21 January 2022

Government failures led to Pakistan tourist snowstorm deaths, report says 

  • 22 people died in Murree on Jan 8 after being stuck in their cars overnight as temperatures plummeted during snowstorm 
  • Inquiry was conducted by a committee consisting of civil servants on the orders of Pakistani Prime Minister Imran Khan 

LAHORE: The deaths of 23 tourists in their cars during a blizzard in Pakistan earlier this month were caused by government failures including delays in moving snow plows and a lack of warnings to people that harsh weather was coming, an inquiry has found. 

The tourists were stranded in the hill resort of Murree, 64 km (40 miles) northeast of the capital Islamabad, where thousands of families had flocked to enjoy the snow. 

“The unfortunate casualties were caused by strategic, tactical and operational failures at various levels,” a report compiled by the inquiry and seen by Reuters on Friday said. 

The inquiry was carried out by a committee consisting of civil servants and set up by the government on the orders of Prime Minister Imran Khan. 

It concluded that the victims reportedly died because of poisoning by carbon monoxide, an odourless gas emitted by car exhausts that can quickly cause death in enclosed spaces. 

Thousands of families had flocked to Murree, in the Margalla foothills, creating traffic congestion as the storm set in. 

Stern action will be taken against those held responsible for the failures, government spokesman Hassaan Khawar told Reuters, adding that “the government has taken firm steps to avoid such mismanagement in future.” 

Efforts to divert traffic to alternate routes proved to be futile as the entire hill town was choked with traffic, the report said, adding that no coordination meeting or contingency planning was carried out to deal with the heavy snowfall. 

There were clear weather warnings of a snow blizzard, which regional disaster management officials did not share in any public forum, the report said, adding that the public was not warned against travel to the hill resort. 

The inquiry report said the warnings and weather forecasts were discussed by officials in WhatsApp groups “too late, leaving no time for planning and preparation.” 

On Thursday, the government released parts of the report and announced the removal of 15 officials for their failure to manage and anticipate the disaster. 

Social media videos and eye-witnesses accounts after the incident showed entire families, including children, lying dead in their snow-covered vehicles.