KARACHI: The State Bank of Pakistan (SBP) paid Rs26.1 billion in interest to the Chinese central bank during the last fiscal year (FY21) for utilizing $4.5 billion trade finance and finance investment under the bilateral currency swap, official data released on Friday showed.
A bilateral currency swap agreement (CSA) was signed between Pakistan’s central bank and the People’s Bank of China in December 2011 to promote bilateral trade, finance direct investment, provide short term liquidity support, and serve other mutually agreed financial purposes by the two banks.
The agreement was renewed in December 2014 for a period of three years with an overall limit of 10 billion Chinese Yuan (CNY) and an exchange rate equivalent of the Pakistani rupee.
The currency swap agreement was further extended in 2018 for a period of three years when the two sides mutually agreed to increase the amount from CNY10 billion to CNY20 billion, according to the financial statements released by the SBP.
“The [State] Bank had purchased and utilized CNY20 billion against PKR [Pakistani Rupee] during the year ended June 30, 2020, with the maturity buckets of three months to 1 year,” said the statement that also showed in tabulated form that Pakistan had paid Rs26.1 billion in interest to China in FY21. “During the year, the overall limit of CNY20,000 million has been further extended to CNY30,000 million ($4.5 billion) for a period of three years against PKR with the maturity buckets of three months to 1 year.”
The SBP report showed the country fully utilized the trade facility by the end of the last fiscal year.
“These purchases have been fully utilized by June 30, 2021. Interest is charged on outstanding balance at agreed rates,” it added.
The report showed the country had paid over Rs20.5 billion in interest on bilateral currency swap during the fiscal year 2020 when the country utilized $3 billion under the facility.
The value of the bilateral currency swap has increased from Rs475 billion in 2020 to Rs731.7 billion in 2021, when translated in rupee terms.
The Chinese trade and investment facility of $4.5 billion is part of the foreign exchange reserves held by the central bank.
The existing $17 billion worth of official foreign currency reserves have largely been built through borrowing, including from private commercial banks.
Pakistan has allocated over Rs3 trillion for debt servicing that also includes interest payments for the current fiscal year. The country has set a revenue collection target of Rs5.83 trillion for the current fiscal year.
However, higher debt servicing is leaving less funds for the country to spend on development initiatives at home.
“The cost of borrowed money is taking heavy toll both in terms of debt burden and debt servicing,” Dr. Ikram ul Haq, a Lahore-based tax expert, told Arab News.
“The payment to China for using running finances and paying other short-term loans is now proving to be disastrous,” he added. “It is widening fiscal deficit and bringing more burden due to the spike in dollar rate.”
Pakistan paid over Rs26 billion in interest to China last year under currency swap arrangement
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Pakistan paid over Rs26 billion in interest to China last year under currency swap arrangement
- The country’s central bank purchased $4.5 billion or CNY30 billion from China in the last fiscal year, official record shows
- The value of bilateral currency swap between the two countries has been increased from Rs475 billion in 2020 to Rs731.7 billion in 2021
Bahrain-based global Islamic finance leader shows interest in developing Islamic capital market in Pakistan
- Development comes day after Pakistan organized an inaugural Islamic Capital Markets Conference
- The country has second-largest Muslim population in the world with very low banking penetration
ISLAMABAD: A leading Bahrain-based international non-profit, aimed at developing the global Islamic finance industry, has showed interest in enhancing collaboration with Pakistan on promoting the Islamic capital market in the South Asian country, the Pakistani finance ministry said on Tuesday, a day after the inaugural Islamic Capital Markets (ICM) Conference in Islamabad.
The conference was jointly organized by the Securities and Exchange Commission of Pakistan (SECP) and the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI), the Bahraini firm responsible for the development and issuance of standards in the areas of Shariah, accounting, auditing, ethics and governance for international Islamic finance globally.
On Tuesday, Sheikh Ebrahim Bin Khalifa Al-Khalifa, who is the chairman of the AAOIFI Board of Trustees, held a meeting with Pakistan's Finance Minister Ishaq Dar in the Pakistani capital and exchanged views with him on mutual collaboration in the field of Islamic finance.
The two figures discussed "enhancing mutual collaboration with Pakistan in social welfare, business & financial sectors," the Pakistani finance ministry said in a statement.
"And promoting Islamic finance industry and capital market in Pakistan."
Pakistan has the second-largest Muslim population in the world with very low banking penetration. The government seeks to increase financial inclusion through promoting Islamic finance, as part of the National Financial Inclusion Strategy. Only 21 percent of the adult population had a bank account in 2017, with 13 percent of adults citing religious reasons for not having them, according to the World Bank.
The SECP and AAOIFI also signed an agreement at the conference for joint cooperation in areas of “common interest” that would support the development of the Islamic banking and finance industry.
In 2021, the government set a target of increasing the share of Shariah-compliant instruments in government securities to at least 10 percent by the end of 2022-2023. There are 22 Islamic banking institutions currently operating across the country.
The assets of Pakistan’s Islamic banking industry had posted a year-on-year growth of 29 percent in fiscal year 2022, Dar said as he addressed the ICM Conference on Monday.
Ex-PM Khan sends defamation notice to health minister after being accused of substance use
- The former prime minister demands unconditional apology in 15 days while serving a Rs10 billion legal notice
- The health minister recently shared Khan’s medical report with journalists while questioning his mental stability
ISLAMABAD: Former prime minister Imran Khan on Tuesday sent a Rs10 billion ($35.05 million) legal notice to Pakistan’s health minister Abdul Qadir Patel for making “false, disparaging and malicious” allegations in a recent news conference wherein he accused the ex-premier of substance use.
Last week, the health minister publicized Khan’s confidential medical report, allegedly prepared while he was taken into custody earlier this month, saying traces of alcohol and illegal drugs were found in the former PM’s urine sample. He also rebutted that Khan had endured a fracture to his leg after an apparent assassination attempt on him last November when he received gunshot wounds while leading an anti-government rally.
The minister shared Khan’s medical report while calling it a “public document” and maintained it also raised questions about the ex-premier’s mental stability.
“We act for and on behalf of Mr. Imran Ahmed Khan Niazi … who has instructed us to serve upon you the following legal notice under Section 8 of the Defamation Ordinance, 2002 … on account of dissemination and circulation of wrongful, baseless, false, misleading, erroneous, malicious and defamatory information/facts made against Our Client by you vide your Press Conference, dated 26.05.2023,” said the notice Khan’s legal team sent Patel.
The presser, as per the notice, was watched in Pakistan as well as all over the world through electronic media channels, YouTube, and various other social media platforms, while its details were also published in national and international newspapers.
The notice asked the health minister to retract his statements, tender unconditional apology, accept that he had misstated information, and pay Rs10 billion for defaming the former prime minister. It asked the minister to take these actions within 15 days, warning him that Khan would otherwise initiate legal proceedings against Patel.
It may be recalled that Khan was arrested by paramilitary Rangers on the instructions of Pakistan’s anti-graft body on May 9 in a corruption reference amounting to £190 million. He remained in the custody of authorities until his arrest and detention were declared “illegal” by the country’s judiciary that ordered his release.
Pakistan’s Khan gets bail on new charge of abetting violence — lawyer
- Ex-PM Khan’s May 9 arrest sparked violent protests, which saw military facilities ransacked
- Khan has appealed for talks to end Pakistan’s political crisis, a demand rejected by the government
LAHORE: Pakistani former prime minister Imran Khan was on Tuesday granted bail on a new charge of abetting violence against the military by his protesting supporters after he was arrested and detained on May 9 in a corruption case, his lawyer said.
The embattled Khan, who says the corruption charges have been concocted, is embroiled in a confrontation with the powerful military, which has ruled Pakistan directly or overseen civilian governments throughout its history.
His May 9 arrest sparked widespread protests by his supporters who ransacked various military facilities, raising new worries about the stability of the nuclear-armed country as it struggles with its worst economic crisis in decades.
Khan, 70, was later freed on the orders of a court.
His lawyer, Intezar Hussain Punjotha, said an anti-terrorism court confirmed the bail on the new charge after the former premier appeared before it and submitted surety bonds.
Khan has denied the charge saying he was in detention when the violence took place.
The bail until June 2 on the new charge means he will not be detained on that charge.
The former international cricket star became prime minister in 2018 with the tacit support of the military, though both sides denied it at the time.
He later fell out with generals and was ousted as prime minister after losing a confidence vote in 2022.
Khan has since then been campaigning for a snap election, with rallies with his supporters across the country, but the prime minister who replaced him, Shahbaz Sharif, has rejected the call for an election before it is due late this year.
The turmoil has exacerbated Pakistan’s economic crisis with inflation at record highs, growth is anaemic amid fears of a sovereign default on external debts unless the International Monetary Fund (IMF) unlocks delayed disbursements.
Dozens of Khan’s supporters have been handed over to army authorities for trial in military courts.
A team of investigators looking into the May 9 violence summoned Khan on Tuesday for questioning but Punjotha said a member of his legal team would go instead.
Khan has appealed for talks to end the crisis. The government has rejected his call.
‘Arsonists’ don’t qualify for dialogue, Pakistani PM says on Imran Khan talks’ offer
- Sharif’s rejection of talks dashed hopes of lowering of political tensions amid stalled talks with IMF as Pakistan on brink of default
- Embattled ex-PM Khan has dialed down his anti-government rhetoric since last week and called for talks in a rare overture
ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday turned down an offer of talks by former premier Imran Khan, saying “anarchists and arsonists” who attacked symbols of the state did not qualify for dialogue.
In a rare overture last week, Khan said he was forming a committee for talks with the government to end the country’s lingering political turmoil, worsened this month by violent protests following the opposition politician’s arrest in a land fraud case.
Authorities began a crackdown on close associates and supporters of Khan after his followers attacked security forces and torched government and military properties, including the home of the Corps Commander in Lahore, following Khan’s detention on corruption charges on May 9.
Troops were deployed to contain the violence, which subsided only after Khan was released on bail on May 12. Thousands of supporters of the popular opposition politician have since been arrested, including the most senior leaders of Khan’s Pakistan Tehreek-e-Insaf (PTI) party. The government and army have said those found to be behind the violence would be tried under relevant Pakistani laws, including the Army Act. Many top Khan aides have also since announced leaving the party.
Against this background, the embattled Khan dialed down his anti-government rhetoric and called for talks.
“Dialogue is deeply embedded in the political process, which helps democracy mature & evolve. Many political & constitutional breakthroughs occurred when political leaders sat across the table to craft a consensus,” Sharif said on Twitter.
“However, there is a major difference here, the anarchists & arsonists who wear the garb of politicians and attack the symbols of the State do not qualify for a dialogue. They should rather be held to account for their militant actions.”
Sharif’s rejection of the talks’ offer dashed hopes of the lowering of political tensions amid stalled talks between the International Monetary Fund and cash-strapped Pakistan, which is currently trying to avoid a default.
Khan was ousted from the office of the PM by an alliance of opposition parties headed by Sharif in a no-confidence vote last year, and has since been calling for new elections. He alleged, without providing evidence, that Sharif, the US and the Pakistani military conspired to remove him from office — allegations they deny. Khan later backtracked saying only the military and Sharif were behind his ouster.
Under the constitution, the next vote is due in October when the parliament completes its term.
First group of 773 Pakistani Hajj pilgrims reaches Makkah from Madinah
- Hajj flights from Pakistan commenced on May 21, final flight will depart for Saudi Arabia on June 21
- Religious affairs ministry says all Hajj pilgrims who landed in Madinah would reach Makkah in eight days
ISLAMABAD: The first group of 773 Pakistani pilgrims had reached Makkah from Madinah ahead of the annual Hajj pilgrimage, the Pakistani religious affairs ministry said on Tuesday.
This year, Saudi Arabia has restored Pakistan’s pre-pandemic Hajj quota of 179,210 pilgrims and waved off the upper age limit of 65. Around 80,000 Pakistani pilgrims are performing the pilgrimage this year under the government scheme, while over 91,000 will use private tour operators.
As per the Pakistani religious affairs ministry, Hajj flights from the country commenced on May 21, with the final flight departing for Saudi Arabia on June 21.
“DG Hajj Mission in Makkah Abdul Wahab Soomro welcomed the pilgrims who were served dates, coffee and juice in the traditional manner on their arrival at Makkah,” the ministry said.
Accommodation arrangements for the pilgrims had been made in the Azizia and Bitha Quraish areas of Makkah.
Director of Hajj Makkah Faheem Afridi said that a special bus service would be available to take pilgrims from Azizia to Haram.
“All the Pakistani Hajj pilgrims are well catered for, will be provided three meals including breakfast in Makkah,” the statement said. “The health of pilgrims will be taken care of. To meet the complete nutritional needs of the pilgrims, fruits are being served in the afternoon and sweets in the night.”
The ministry said all Hajj pilgrims who landed in Madinah would reach Makkah after eight days.
For the Hajj pilgrimage, pilgrims perform the welcome tawaf after entering Makkah, circling the Kaaba seven times in a counterclockwise direction, starting at the Black Stone. They then head to the hills of Safa and Marwa, where they perform saee, which is the act of going back and forth between the two hills seven times.
Pilgrims then travel to Mina, an area of 20 square kilometers nearly five kilometers away from the Grand Mosque in Makkah, on the eighth day of Dhul Hijjah, also known as Yom Al-Tarwiyah, where they will stay and fill their day and evening with prayers and supplications, resting and consuming water ahead of their long, perilous journey.
On the second day of Hajj, pilgrims travel to Mt. Arafat, 20 kilometers away. The day is devoted to prayer and supplications as they observe duhr (noon) combined with asr (afternoon) prayers until sunset.
The Day of Arafat is considered the most critical day for pilgrims and the millions not performing. It is the day that, “atones for the sins of the preceding and coming (Muslim) year” and is the best day for worship and supplication in the entire year.
After sunset, pilgrims descend from Mount Arafat and make their way to Muzdalifah for isha (night) prayers, collect pebbles no larger than the size of a fingertip ahead of the stoning ritual on the next day, and rest until midnight or dawn, when they will make the long journey back to Mina for the final steps of Hajj, the stoning ritual at Jamarat Al-Aqabah.
On the third day of Hajj, Eid Al-Adha, pilgrims stone the Jamarat Al-Aqabah, or the big pillar, a place where the Prophet Ibrahim threw seven pebbles at the devil. After doing so, pilgrims change from their Ihram; sacrificial animals are slaughtered, and men cut or shave their heads while women cut a fingertip’s length of hair to commemorate the end of the Hajj pilgrimage.
For three days, known as Ayyam Al-Tashreeq, pilgrims stay in Mina and perform the stoning of the other two pillars, Al-Jamarah Al-Wusta and Al-Jamarah Al-Sughra.
