After weeks on losing streak, Pakistani rupee gains 2.7% on hope of Chinese, IMF funds

Pedestrians walk past a roadside currency exchange stall displaying examples of Pakistani and US currency notes in Karachi, Pakistan, on February 11, 2013. (AFP/File)
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Updated 23 June 2022

After weeks on losing streak, Pakistani rupee gains 2.7% on hope of Chinese, IMF funds

  • A day earlier, Pakistan said China has signed $2.3 billion loan facility agreement
  • Traders say expected inflows from China, exporters selling dollars caused rupee to appreciate

KARACHI: The Pakistani rupee on Thursday appreciated by 2.27 percent against the US dollar, closing at Rs 207.23 by ending weeks of a losing streak in the interbank market, traders and analysts said. 

The rupee appreciated by Rs4.7 in the interbank market a day after Finance Minister Miftah Ismail announced China had signed the agreement with Pakistan to rollover a $2.3 billion loan. 

The South Asian country, whose foreign exchange reserves have declined by $748 million to stand at $8,237.7 million during the week ended on June 17, 2022, is expecting the Chinese inflows sometimes this weekend, according to the central bank’s data released on Thursday. 

Pakistan’s reserves declined mostly due to external debt and import payments. 

“Today was a good day for Pakistan’s economy as the rupee strengthened against the dollar mainly due to talks with the International Monetary Fund (IMF),” Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan (ECAP), told Arab News. 

Paracha said another reason for the rupee gaining strength was that exporters had sold around $150 million in the market, which they were holding back. 

“Similarly, importers also did not opt to buy dollars so as the sentiments changed, supply increased and demand subdued. The currency has appreciated.” 

Currency dealers hope inflows from China will strengthen the rupee further, so much so that it gains by Rs10 against the dollar. 

“I firmly believe that the dollar-rupee parity should not be more than Rs 190 in the interbank market,” Paracha said. “And when we look at our financial credentials, the currency should not exceed Rs 160 against the dollar,” he added.

Indian court orders BJP spokeswoman to 'apologise to whole nation' over anti-Islam remarks

Updated 01 July 2022

Indian court orders BJP spokeswoman to 'apologise to whole nation' over anti-Islam remarks

  • Anger engulfed Islamic world last month after Nupur Sharma's incendiary comments during a TV debate
  • Nearly 20 countries called in their Indian ambassadors for explanation, rallies erupted around South Asia

NEW DELHI: A ruling party spokeswoman whose remarks on Islam embroiled India in a diplomatic row and sparked huge protests should apologize for having “set the country on fire,” New Delhi’s top court said Friday. 

Anger engulfed the Islamic world last month after Nupur Sharma’s incendiary comments during a TV debate on the relationship between the Prophet Muhammad and his youngest wife, with nearly 20 countries calling in their Indian ambassadors for an explanation. 

Rallies also erupted around South Asia, with police killing two demonstrators in India, while this week two Muslim men were accused of the grisly murder of a Hindu tailor who had posted in support of Sharma on Facebook. 

“She and her loose tongue have set the country on fire,” India’s Supreme Court said during a procedural hearing on several criminal complaints filed against Sharma. 

“This lady is single-handedly responsible for what is happening in the country,” it added. “She should apologize to the whole nation.” 

Since her comments, Sharma has been subjected to multiple police complaints filed against her across India by members of the public. 

While the 37-year-old’s whereabouts are unknown, her lawyer was in court asking that the cases be consolidated in New Delhi, a request denied Friday. 

Sharma was at one time seen as a rising star in the governing Bharatiya Janata Party (BJP) but her remarks forced it into damage control. 

The party soon suspended the spokeswoman from her post and issued a statement insisting it respected all religions. 

Since coming to power nationally in 2014, the BJP under Prime Minister Narendra Modi has been accused of championing discriminatory policies toward followers of the Islamic faith. 

Critics also say the government has presided over a crackdown on free speech and rights activists. 

This week police arrested the Muslim journalist Mohammed Zubair, a vocal critic of the government who had helped draw attention to Sharma’s remarks. 

He was arrested on Monday and remains in custody over a four-year-old tweet about a Hindu god that police said had been the subject of complaints by Hindu groups.

Pakistan urges caution over Eid holidays as coronavirus cases rise

Updated 01 July 2022

Pakistan urges caution over Eid holidays as coronavirus cases rise

  • Pakistan has had few COVID-19 cases in recent months and had done away with almost all precautions
  • 694 positive cases reported in last 24 hours, nearly double the number at the start of the week on Monday

ISLAMABAD: Pakistani Health Minister Abdul Qadir Patel on Friday called on the public to take precautionary measures as coronavirus cases once again rise in the country, calling masks “essential” during the upcoming Eid Al-Adha holiday and urging people not to shake hands and hug.

Pakistan has had very few COVID-19 cases over recent months and had done away with almost all precautions.

But over the past 24 hours, the national COVID positivity ratio had risen to 3.93 percent with 694 positive cases, nearly double the number at the start of the week on Monday, according to data released on Friday by the National Institute of Health, Islamabad (NIH).

“We must take precautionary measures against coronavirus and ensure social distancing,” Patel said in a statement. “Mask wearing is essential during the time of Eid-ul-Adha and avoid going to crowded places.”

The minister appealed to religious scholars to ensure social distancing at mosques and urged the public to avoid hugging and shaking hands during the Eid holidays. 

On Thursday, Pakistan issued fresh standard operating procedures (SOPs) for government office.

The NIH in a notification urged government staffers to avoid shaking hands and mandated wearing face masks and incorporating social distancing in seating plans and during prayers.

On Wednesday, Prime Minister Shehbaz Sharif chaired a meeting to take stock of the coronavirus situation urging masses to take precautions against the infection.

Pakistan disbanded the National Command and Operations Center, its main pandemic response body, on March 31 as infections fell to the lowest since the outbreak began in 2020.

However, the South Asian country on May 23 reconstituted the NCOC at the NIH after health officials detected a new omicron sub-variant in a passenger arriving from Qatar. The new sub-variant of omicron is said to be highly infectious, though not as deadly as previous coronavirus strains.

Pakistan’s Civil Aviation Authority (PCAA) last week once again made it mandatory for all passengers on domestic flights to wear masks. Authorities are also urging eligible individuals to get booster vaccine shots.

There have been 1,536,479 infections and 30,395 coronavirus-related deaths reported in Pakistan since the pandemic began.

Pakistan inflation rose 21.3% in June 2021, highest rate in 13 years

Updated 01 July 2022

Pakistan inflation rose 21.3% in June 2021, highest rate in 13 years

  • In May, consumer price index was recorded at 13.8 percent, year-on-year
  • Fuel prices have been raised by about 90 percent since end of May

KARACHI: Pakistan’s consumer price index (CPI) rose 21.3% in June from a year earlier, the statistics bureau said on Friday, for the South Asian nation's highest inflation in 13 years.

In May, the CPI was up 13.8% on the year. The month on month rise in June was 6.3%.

The spike comes as fuel prices have risen about 90% since end May after the government scrapped costly fuel subsidies in a bid to cut its surging fiscal deficit and secure resumption of an IMF bailout programme.

Transport saw the biggest rise, with its index rising 62.2% in June on the year.

The price index for food items, which make up about a third of the CPI basket, rose 25.9%.

Pakistan has been struggling with high inflation for the last few months.

Despite rising global oil prices, subsidies for fuel and power were adopted in March 2022 by the government of previous prime minister Imran Khan, as he faced mounting discontent over his handling of the economy and rising inflation.

He was ousted in April, and the new government began reversing the costly subsidy, which it brought on par with international prices late last month.

Prices of fuel were hiked further on Thursday, with the cash-strapped government imposing a petroleum levy in its battle to reduce the fiscal deficit.

The levy, which officials expect to rise even further, was part of fiscal consolidation measures agreed with the IMF to resume the bailout programme. 

In rare animal rights push, Pakistan government to work with PETA on ‘critical’ reforms

Updated 01 July 2022

In rare animal rights push, Pakistan government to work with PETA on ‘critical’ reforms

  • Government on Thursday banned testing, surgeries on live animals at veterinary schools in Islamabad
  • Says will amend British-era law, replace it with “Pakistan’s first comprehensive animal welfare law”

ISLAMABAD: Shalin Gala, vice president at global animal rights advocacy group PETA, on Friday hailed “landmark” reforms in Pakistan that banned tests and surgeries on live animals for veterinary education, and said the organization would be working with the government on more critical reforms in training that would spare the lives of animals.

In a rare move to ensure animal rights in Pakistan, the government on Thursday banned testing and surgeries on live animals at veterinary schools and industrial complexes in the federal capital and announced a Rs15,000 ($73) fine and jail term for animal cruelty offenders.

The decision came after widespread outrage in Pakistan over videos that went viral in May showing animals in various states of distress after allegedly being operated upon by veterinary students. Activists and members of the public have widely condemned the practices and called for action.

At veterinary schools around the world, the practice of using live animals to teach surgery has been on the decline in the last decade. But an Arab News investigation published on June 10 quoted students and university management saying live animals were being used to teach surgical skills, though they added proper procedures were followed.

“Pakistan’s landmark reforms will ban tests and surgeries on live animals for veterinary education and shift to sophisticated humane methods,” Gala told Arab News.

He said PETA was “delighted” to have shared recommendations for improving veterinary training with Salman Sufi, head of Prime Minister Shehbaz Sharif’s Strategic Reforms Unit.

“We look forward to our upcoming meeting with him to discuss further critical reforms in biomedical research and training that will spare animals’ lives and benefit patients, alike,” Gala added.

On Thursday, the government banned live testing of animals at veterinary schools and industrial complexes in Islamabad, with Sufi announcing that the government would introduce amendments to a British-era law and replace it with “Pakistan’s first comprehensive animal welfare law.”

“Amendments for national level law are ready ... The bill will be tabled in the National Assembly during the next session [for debate and approval],” he said.

Citizens would now be able to report any acts of animal cruelty through a hotline and offenders would face fines of up to Rs15,000 as well as jail terms.

A standard set of guidelines was also going to be announced to regulate pet markets across the country, Sufi said, adding that violators would be fined and their shops closed.

Pakistani officials call for renegotiating free trade agreement with China

Updated 01 July 2022

Pakistani officials call for renegotiating free trade agreement with China

  • Trade Development Authority of Pakistan says free trade agreement could “be negotiated at political and diplomatic level”
  • Agreement poses serious threat to industry, impeding exports in absence of comprehensive review, apex trade body says

KARACHI: Pakistani trade officials said on Thursday non-tariff barriers were making it difficult to increase exports to China, as local industrialists and officials called for reviewing a free trade agreement between the two countries which they said posed a threat to Pakistan’s economy.

According to the Chinese media which recently quoted their country’s General Administration of Customs, Pakistan’s export to China increased by 68.9 percent in 2021 to $3.58 billion while China’s export to the South Asian country rose by 57.8 percent to $24.23 billion.

Statistics compiled by Pakistan’s central bank reveal the country received $2.5 billion in export payments in 2021 while imports from China stood at $16.13 billion.’

A second phase of the free trade agreement with China was implemented on January 1, 2022, which enabled Pakistan to export over one thousand products on zero duty.

“Non-tariff barriers are the main obstacle to our exports to China,” Arif Ahmed Khan, the chief executive of Trade Development Authority of Pakistan (TDAP), told Arab News on the sidelines of a seminar on the impact of the free trade agreement between the two states, adding this could “be negotiated at political and diplomatic level.”

Khan said the seminar was organized to highlight issues that were making it difficult for Pakistan to fully benefit from the agreement.

“We have benefited from the free trade agreement,” he added. “But we have to see how we can further benefit from it, reduce our losses, and identify areas where we need to improve.”

Responding to a question about renegotiating the deal with China, the TDAP chief said “we first need to identify the areas where renegotiations are needed which, I think, include the removal of non-tariff barriers.”

Addressing the gathering, Irfan Iqbal Sheikh, president of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), said there was a widespread impression the agreement with China could pose a serious threat to the country’s industry and economy without its comprehensive and technical review.

“We should try to achieve maximum benefit from this agreement by further negotiating for favorable conditions,” he said.

The FPCCI president said dumping of Chinese goods in Pakistan had led to the closure of many cottage industries.

“The influx of cheap imports from China may have adverse economic impact, especially on domestic manufacturing sectors,” he said.

Sheikh told Arab News there were many things that needed to be “fine-tuned” in the free trade agreement.

“Pakistan’s actual exports to China should be between five and seven billion dollars in the next two to three years,” he added.

Hassan Daud Butt, chief executive officer of Khyber Pakhtunkhwa Board of Investment and Trade (KP-BOIT), told Arab News on the sidelines of the event a major issue impeding trade with China was the lack of understanding between the business communities of the two countries.

While he recognized that Pakistan’s trade with China had increased, he said Pakistani exporters should explore niche markets for their products.

He said the agreement could be renegotiated while pointing out that “monitoring and evaluation [of trade under the bilateral arrangement] should be a continuous process.”