KARACHI: Pakistan’s national currency continued to lose its value against the US dollar and hit a new all-time low as the greenback closed at Rs176.20 on Monday.
The rupee has lost its value by 15.7 percent, or more than Rs24, since May this year, when the dollar was trading at around Rs152.
While analysts believe the rupee is weakening against the greenback due to a high demand for imports and an expectation of higher import bills for November 2021, currency dealers say the reasons for rupee’s depreciation were not clear, despite a decline in oil prices and the clearance of a Saudi financial package.
Pakistan and Saudi Arabia on Monday formally signed an agreement under which the Saudi Fund for Development (SFD) will deposit $3 billion in the State Bank of Pakistan (SBP).
In October, SFD announced a financial package of $4.2 billion to help the South Asian nation as it struggled with depleting foreign reserves. The package includes suppling $1.2 billion worth of oil to Pakistan on credit.
“The demand of dollar for imports is exerting pressure on Pakistani rupee besides it is expected that November import bill will be higher as well,” said Samiullah Tariq, research director at the Pakistan Kuwait Investment Company (PKIC).
Tariq said the flow of Saudi dollars into Pakistan would improve market sentiment despite an expected high demand for dollar for imports.
“The Saudi deposits will improve the sentiment of the market,” he said. “The deposit will increase the import coverage of the country for three months.”
But Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), said analysts were unable to comprehend why the dollar was appreciating in the interbank market, despite the clearance of the Saudi deposit facility and around 10 percent decline in oil prices.
On Monday, the rupee appreciated in the open market and the US dollar traded at Rs177.80 for selling and Rs177.30 for buying. The greenback traded at Rs179 for selling and Rs178 for buying the previous day.
“There is more supply of dollar than the demand in the open market,” Paracha said, explaining the rupee’s appreciation.
Pakistan’s equity market jubilated over the clearance of the Saudi deposit facility, with the benchmark KSE 100 index gaining 1215.89 points on Monday.
“Stocks closed record higher after reports that federal cabinet approved terms of $4.2 billion Saudi package,” Ahsan Mehanti, chief executive of Arif Habib Corporation said. “Strong economic outlook ahead of release of IMF tranche and surging exports, remittances and global crude oil prices played a catalyst role in the bullish close.”
Pakistani rupee hits new all-time low against greenback
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Pakistani rupee hits new all-time low against greenback
- US dollar closed at Rs176.20 on Monday despite clearance of Saudi deposits
- Pakistani currency has lost 15.7 percent of its value since May this year
Pakistani PM seeks business community’s support to double exports in five years
- Pakistan’s total exports during the current fiscal year, or July-March, stood at $22.93
- Pakistan wants to double exports through focus on textiles, agriculture, mining and IT
KARACHI: Prime Minister Shehbaz Sharif on Wednesday sought support from Pakistan’s business community to double export volume during the next five years of his government’s term.
Addressing business leaders in a ceremony held in the southern port city of Karachi, Sharif said the government, in consultation with the business community, would form a comprehensive policy framework to ensure export-led growth and resolve Pakistan’s foreign exchange reserve crisis.
Pakistan’s total exports during the current fiscal year, or July-March, stood at $22.93, which it wants to double through a focus on sectors like textiles, agriculture, mines and minerals and information technology.
“You are actually the backbone of the national economy as without your support, the government cannot bring the country out of economic crisis,” the prime minister told the business community, urging it to sit with his government to resolve issues and challenges.
“We should get together in the larger national interest. The brilliant minds should together find ways to overcome the challenges and problems hindering the country’s development and prosperity.”
Sharif’s meeting with the business leaders came as Pakistan is seeking a new long-term and larger IMF loan, with finance minister Muhammad Aurangzeb saying Islamabad could secure a staff-level agreement on the fresh program by early July.
The global lending agency has confirmed its executive board meeting for April 29 to discuss the approval of $1.1 billion funding for the South Asian state, the second and last tranche of a $3 billion standby arrangement with the IMF, which it secured last summer to avert a sovereign default and which runs out this month.
ADB highlights special focus on climate action, social equity in post-floods Pakistan
- The bank provided $180 million for climate-resilient, low-carbon municipal services in Punjab province last year
- It also worked to increase female inclusion in agriculture sector by helping them handle pesticides and fertilizers
KARACHI: The Asian Development Bank (ADB) announced on Thursday it deployed significant resources in Pakistan last year to aid the country’s economic recovery from the devastating 2022 floods, while supporting the government in other areas, including climate change, food security and gender parity, for sustainable and inclusive development.
The Philippines-based international financial institution began its operations in December 1966 and has since been promoting economic and social development in Asian and Pacific regions. Pakistan, one of its early members, has received ADB assistance over the years and developed many urban services and social sectors with its help.
In its Annual Report 2023, the ADB highlighted different areas in which it provided assistance to Pakistan during the last year.
“ADB signed a loan of $180 million to help develop climate-resilient and low-carbon municipal services for up to 1.5 million residents in the Punjab cities of Bahawalpur and Rawalpindi,” the report said.
“For Bahawalpur, the project includes a new recycling facility, a landfill with measures to mitigate greenhouse gas emissions and leachate, and new equipment and vehicles for citywide waste collection,” it continued. “For Rawalpindi, the project will, among other deliverables, construct a water treatment plant to process 54 million liters per day and implement distribution systems to serve around 82,000 households with metered connections.”
The report said the bank also signed an emergency grant of $5 million with the authorities in Islamabad to top up its flood assistance of $475 million from 2022.
“The grant supports farming households, including those headed by women, in the most flood-impacted area of Balochistan Province,” it informed. “It provides about 60,000 households with climate-resilient rice seeds sufficient to cultivate around 54,000 hectares, and includes measures to strengthen on-farm resilience to disasters triggered by natural hazards.”
The ADB also worked to improved agricultural productivity in the flood-affected Khyber Pakhtunkhwa province while trying to bolster the inclusion of women in by providing around 28,000 of them with training on seed cleaning and storage practices as well as on the safe handling of pesticides and fertilizers.
“ADB is also working to improve conditions for Pakistani women seeking to establish or expand their own businesses, particularly access to finance without the need for credit history or collateral,” the report added.
The bank also signed a $250 million loan for power transmission strengthening in the Khyber Pakhtunkhwa and Punjab provinces to help achieve environmental sustainability and climate resilience in the country’s power sector.
“The project aims to expand the national grid and enhance grid stability to improve energy access in the country, where only 80 percent of the population has access to electricity,” it said. “Upgrades under the project are expected to help supply 2 gigawatts of additional clean peak power and avoid about 13,700 tons of greenhouse gas emissions every year.”
ADB said it also provided a $300 million policy-based loan to the country for sustainable, broad-based and inclusive economic growth by strengthening the government’s capacity to generate domestic revenues to reduce budgetary constraints and restore macroeconomic stability.
“The program will help Pakistan improve tax administration and compliance, including through digitization,” the report said. “It will also enhance public expenditure and debt management, and increase trade and investment flows.”
Additionally, the bank committed $360 million under the Central Asia Regional Economic Cooperation (CAREC) program to help upgrade 330 kilometers of the national highway in Pakistan.
“This span of roadway links Pakistan’s hinterlands to CAREC Corridor 5, a vital trading route between landlocked Central Asian countries and the ports of Gwadar and Karachi,” it explained. “By enhancing the climate and disaster resilience of the highway, ADB is helping overcome high risks of road flooding and opening up a bottleneck to regional trade.”
Pakistan’s planning minister discusses enhanced educational ties with UK delegation
- Ahsan Iqbal proposes faculty training, research collaboration and UK campus expansions in Pakistan
- He says UK universities should develop specialized knowledge clusters through Pakistani scholars’ expertise
ISLAMABAD: Pakistan’s planning minister Ahsan Iqbal met a delegation from the United Kingdom, said an official statement on Thursday, to discuss the possibility of fostering closer ties and enhancing collaboration between the educational institutions in both countries.
British universities are a popular destination for Pakistani students due to the quality of education and the strong historical and cultural ties between the two countries.
Many students from Pakistan go to these educational institutions on scholarships offered by various organizations, such as the British Council, UK government and universities themselves, while others fund their studies independently.
The Pakistani planning minister presented various recommendations during his meeting with the delegation led by Steve Smith, the UK government’s International Education Champion, along with officials of the British High Commission.
He proposed faculty training programs to bolster academic expertise across borders, encouraging UK universities to establish campuses in Pakistan to promote educational accessibility and harnessing the expertise of Pakistani scholars in British universities to develop specialized knowledge clusters on the country.
“Pakistan envisions a future where universities in Pakistan are categorized into the Champions League (having first-tier universities) and the National League (having second-tier universities), driving excellence and accessibility in higher education,” Iqbal said during the meeting.
He highlighted the imperative for joint research initiatives, pointing at the importance of establishing joint research groups and fostering collaborations between PhD scholars from both countries.
The visiting delegation official reaffirmed the British government’s commitment to building international partnerships in education, citing the presence of over 20,000 Pakistani students in his country and 8,000 students who are pursuing degree programs in Pakistan with UK’s financial support.
The two sides also discussed procedural issues while pointing to the need for streamlined regulations, with a particular emphasis on minimizing hurdles for universities and strengthening the link between research institutions and economic growth.
They agreed to hold further dialogue and take concrete action toward implementing the planning minister’s recommendations to further solidify the foundation for enduring academic cooperation between the two countries.
US ambassador optimistic about Pakistan-IMF talks ahead of key funding meeting on April 29
- The IMF has confirmed its executive board’s meeting to discuss the approval of $1.1 billion for Pakistan next week
- Ambassador Blome says the IMF’s positive feedback will further encourage investors and help Pakistan’s ailing economy
ISLAMABAD: US Ambassador Donald Blome expressed optimism over the ongoing negotiations between Pakistan and the International Monetary Fund (IMF) on Wednesday, as the global lending agency confirmed its executive board meeting for April 29 to discuss the approval of $1.1 billion funding for the South Asian state.
The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which it secured last summer to avert a sovereign default and which runs out this month. Pakistan is now seeking a new long-term and larger IMF loan, with finance minister Muhammad Aurangzeb saying Islamabad could secure a staff-level agreement on the fresh program by early July.
Ambassador Blome praised the performance of the country’s economic team in a meeting with the newly elected Senate chairman, Yousaf Raza Gillani, at the Parliament House wherein he also discussed strengthening of US-Pakistan bilateral relations.
“Acknowledging the positive economic indicators of Pakistan, Ambassador Blome noted the downward trend in inflation and high dollar reserves, stating that the IMF’s positive feedback would encourage investors,” said an official statement issued after the meeting. “He highlighted the flourishing gaming industry in Pakistan and called for enhanced [US-Pakistan] cooperation in the digital sector.”
The American envoy also noted the potential for further economic cooperation between the two countries in his conversation.
Pakistan’s $350 billion economy faces a chronic balance of payment crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year — three-time more than its central bank’s foreign currency reserves.
Pakistan’s finance ministry expects the economy to grow by 2.6 percent in the current fiscal year ending June, while average inflation is projected to stand at 24 percent, down from 29.2 percent in fiscal year 2023/2024. Inflation soared to a record high of 38 percent last May.
With input from Reuters
In Rawalpindi, 77-year-old tea shop named after India’s Ludhiana is still a hit with customers
- Ludhiana Tea Shop owners migrated from India’s northwestern city at the time of Partition in 1947
- Customers say they come from far-off places to relish the taste of tea at the shop which they find unique
RAWALPINDI: At a small tea shop in Pakistan’s garrison city of Rawalpindi, Nazar Hussain pours piping hot tea from a kettle into small cups and hands them away to eager customers, many of them regulars who have been frequenting the shop for decades.
This is the scene from a typical evening at Ludhiana Tea Shop, located in the narrow streets of Rawalpindi’s old Lal Kurti area. The tea shop takes its name after the northwestern Indian city of Ludhiana, from where its owners migrated to Rawalpindi in 1947.
“My grandfather named this business in the memory of his hometown in India,” Hussain, who took charge of the shop in 1976, told Arab News, adding that he also sold dairy products and ghee.
“We are a family of milk sellers,” he said. “In India, we used to do the same. We were milk sellers and we used to own buffaloes.”
The shop has been serving tea to customers for the past 77 years. Agha Asghar Saeed, 72, is one of them and has been coming here since he was young.
“I was born here. I spent my childhood here, my youth and now my old age as well,” he told Arab News. “I’ve been having this tea since then.”
During the Muslim holy month of Ramadan, Saeed would break his fast at home but have tea at Ludhiana Tea Shop.
“I am addicted to this tea,” he explained.
But what inspires such loyalty in customers?
“You have to buy good quality milk,” Hussain said, adding that he purchased pure and organic milk for his shop that was a bit expensive. “Not everyone knows how to buy good milk.”
He maintained that most milk sellers in Pakistan did not sell pure milk, making him take several sips while buying to check the fat content.
Just like the milk, he continued, the quality of the tea leaves was also important.
The price of one cup of tea used to be around five paisas several years ago.
“Now, we sell it for Rs60 (22 cents),” he added.
The rich taste of Ludhiana Tea Shop means Muhammad Hasnain and his friends visit it every day rather than go to other tea shops in the neighborhood.
“Obviously, everybody wants a good bang for their buck,” Hasnain told Arab News. “The most important thing for anyone is that the quality should be good, and both quality and quantity are good here.”
Ludhiana Tea Shop offers customers deep-fried sweet and savory snacks, such as pakoras, samosas, jalebis and spring rolls, delectable items popularly consumed in Pakistan with tea.
Muhammad Shoaib Khan, a man in his 30s, informed he visited the shop with his friends at least a couple of times every day.
“We come on our bikes and travel for at least 1.5 kilometer on every trip,” Khan told Arab News. “It roughly adds up to 6 kilometers.”
Despite the cost of petrol, which has surged in recent times, Khan said he visited the shop for tea because it was worth it.
Hussain said he understood why customers came from far-off places just to have a cup of tea at his 77-year-old shop.
“Everyone cannot make good tea,” he said. “They don’t pour their heart in it. They lack passion. Making good tea is something that can only be done from the heart.”
