Pakistan rupee gains by 0.13% after China inflows, hopes of IMF deal

A Pakistani man counts Pakistan's rupees at his shop in Karachi on May 16, 2019. (AFP/File)
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Updated 30 June 2022

Pakistan rupee gains by 0.13% after China inflows, hopes of IMF deal

  • Statistics reveal Pakistan’s national currency depreciated by 30% against US dollar in the outgoing fiscal year
  • Analysts warn against political uncertainty and its adverse impact on Pakistan’s economy and currency

KARACHI: Pakistan’s rupee continued to gain against the US dollar on Thursday, appreciating by 0.13% as the market reacted to “positive vibes” from the International Monetary Fund (IMF) and increase in forex reserves in the wake of the inflows from China, currency dealers and analysts said.

The rupee increased in value against the dollar by Rs0.27 before closing at Rs204.85 in the interbank market.

Pakistan’s national currency has taken a battering during the outgoing fiscal year 2021-22, losing its value by a whopping 30% and touching an all-time low of Rs211.93 against the US dollar on June 22, according to the central bank’s data.

Pakistan’s fast-depleting foreign exchange reserves, a huge import bill and delay in the revival of a $6 billion loan from the IMF have caused the rupee to rapidly depreciate over the past few weeks.

On Tuesday, Pakistan received a Memorandum of Economic and Financial Policies (MEFP) from the IMF for the combined 7th and 8th reviews, the development being considered an important one for the resumption of the loan facility.

“Since positive vibes are coming from the IMF front, the rupee is constantly gaining value against the dollar,” Zafar Paracha, senior currency analyst, told Arab News.

“Today, it was trading at Rs203.50 and was expected to close at Rs203,” he continued. “However, the demand pushed the value of the rupee toward the lower side by the end of the day.”

Paracha said after the recent development on the IMF front, the business sentiment had changed and a downward trend in the value of dollar had been observed in the market.

“Besides, exporters are also selling their dollars in the market while importers are holding back due to currency fluctuations,” he noted, explaining that the demand for the dollar was slow and the supply was high, which was causing the rupee to appreciate.

Pakistan’s foreign exchange reserves increased last week when China deposited RMB15 billion (roughly $2.3 billion) into Pakistan’s central bank, a few days after some Chinese banks signed a loan agreement with Pakistan.

Inflows from China and progress in Islamabad’s talks with the IMF had caused the rupee to gain strength, currency dealers said.

“The government has played a key role in its talks with the IMF and it is expected that the authorities will sign an agreement with the fund in July 2022,” Malik Bostan, president of the Forex Association of Pakistan, told Arab News, adding that inflows of $2.3 billion from China had also contributed to the appreciation of the Pakistani rupee.

Bostan said reports of former finance minister Ishaq Dar’s arrival in Pakistan next month had also changed the market sentiment and induced exporters to sell their dollars.

“Dar is known for keeping the dollar in check, so exporters have started selling their dollar holdings,” he added. “Due to this, dollar sales have increased by around 30%.”

Dealers and analysts said the country was expected to receive financial support from friendly countries such as Saudi Arabia and other donors after the completion of the IMF review.

However, they warned against political uncertainty in the country and its adverse impact on Pakistan’s economy and currency.


22 Saudi cadets graduate from Pakistan Air Force Academy

Updated 13 sec ago

22 Saudi cadets graduate from Pakistan Air Force Academy

  • Both countries enjoy deep-rooted ties in culture, defense
  • Pakistan has trained many Saudi officers over the years

ISLAMABAD: Twenty-two candidates from Saudi Arabia completed their training at the Pakistan Air Force (PAF) Asghar Khan Academy at Risalpur on Thursday.

The ceremony took place at the academy, located in the town of Risalpur in Pakistan’s northwestern Khyber Pakhtunkhwa province.

Pakistan and Saudi Arabia’s air forces enjoy cordial relations, with the former having trained many Saudi officers over the years. Last year, a Royal Saudi Air Force (RSAF) contingent of nearly 180 pilots and air engineering technicians participated in a two-week drill organized by the PAF.

“A total of 115 Aviation Cadets, 10 Gentleman Cadets and 22 Royal Saudi Air Force Cadets graduated at the passing out parade ceremony,” the PAF said in a statement.

“Best Allied Cadet Trophy for 92nd Royal Saudi Air Force Cadets’ Course was won by Royal Saudi Air Force Cadet Fahad Mobarak Al Johani whereas the Best Allied Cadet Trophy for 94th Royal Saudi Air Force Cadets’ Course was awarded to the Royal Saudi Air Force Cadet Waleed Khalid Abdullah Al Turki,” the statement read.

The chief guest, Chairman Joint Chiefs of Staff Committee (CJCSC) General Nadeem Raza awarded branch insignias to the graduating cadets and trophies to the distinction holders.

Saudi Arabia’s Ambassador to Pakistan, Nawaf bin Said Al-Malki, was also present at the graduation ceremony.

Islamabad and Riyadh enjoy deep-rooted brotherly and defense ties. In October last year, the naval forces of Pakistan and Saudi Arabia conducted the joint Naseem Al-Bahr 13 exercise in the Arabian Sea with the Saudi F-15 aircraft participating in a missile-firing drill for the first time.


As flood waters recede, a rising tide of disease in southwest Pakistan

Updated 58 min 30 sec ago

As flood waters recede, a rising tide of disease in southwest Pakistan

  • 38,476 cases of malaria, skin and eye diseases, acute respiratory infection and cholera reported in Balochistan since Sept. 17, 2022
  • Influx of patients has overwhelmed Pakistan’s weak health system, particularly in Balochistan, country’s poorest province

Dera Allah Yar, BALOCHISTAN: As Yar Khan stood outside the outpatient ward at the District Headquarter Hospital (DHQ) in a small town in southwestern Pakistan, it was not his own stomach ache that worried him but the high fever that had for days gripped his one-year-old nephew.

Khan’s family fears the infant has one of the many infectious and water-borne diseases that have spread in the aftermath of devastating monsoon rains and floods in Pakistan.

Record rains in south and southwest Pakistan that began in mid-June and glacial melt in northern areas triggered the flooding that has killed over 1,600 people and affected nearly 33 million people in the South Asian nation of 220 million, sweeping away homes, crops, bridges, roads and livestock and causing an estimated $30 billion of damage.

Weeks after the rains stopped, large swaths of the country’s southwestern Balochistan and southern Sindh provinces remain flooded, and millions of survivors, many living in tents, makeshift shelters or under the open sky on road sides, face a host of other problems, including diseases like diarrhea, skin infections, coughs and colds, government and relief officials say.

The presence of mosquitoes and the spread of the diseases they carry, like dengue fever and malaria, have become particularly concerning.

Data from the Balochistan health department showed around 38,476 cases of malaria, skin diseases, acute respiratory infection (ARI), cholera and eye infections have been reported in Balochistan since September 17, 2022. The World Health Organization warned on Thursday a “full-scale operation” was needed in Balochistan to stem the tide of disease.

The influx of new patients daily has overwhelmed Pakistan’s already weak health system, particularly in Balochistan, the country’s poorest and least developed province.

“I have taken him to all the doctors in my village but my nephew didn’t get well,” Khan, 21, told Arab News from Dera Allah Yar city in Balochistan’s Jaffarabad division, where he had traveled from his village of Chatan, still “neck deep” in water, six kilometers away.

“Now I have brought him to the DHQ Hospital and traveled through flood water to reach Dera Allah Yar,” the daily wage laborer added.

“For too many days I have been feeling pain in my stomach,” Khan added. “I visited all doctors in my village but they were unable to diagnose what is causing my pain and why my nephew is sick.”

“In the three or four houses of my relatives, everyone is ill.”

Tania Bibi, 20, a resident of Karam Shah Goth in Dera Allah Yar, was diagnosed with a skin disease ten days ago. But her illness is the least of her worries, she said, as her four children are all ill.

“It’s been a month, we have been living on the Dera Allah Yar highway which is surrounded by contaminated flood water,” Bibi told Arab News. “There are too many mosquitoes and insects.”

She lightly touched the spots on her face: “The pimples popped up after the flood. It used to hurt a lot, it still hurts, it’s still the same.”

Bibi said her daughters and one son had been diagnosed with malaria and anemia respectively and now another son had high fever.

Doctors at DHQ Dera Allah Yar had prescribed medicines for the whole family but Bibi, whose husband is an out-of-work daily wage laborer, said she did not have money to buy them.

The hospital itself is struggling to deal with the influx of patients from surrounding areas.

“We have a shortage of medicines and staff to deal with the overburden of patients at the DHQ Hospital,” Dr. Ishma Khoso, a senior medical officer at the DHQ Dera Allah Yar, said. “Because people from Sohbat Pur district and other far-flung areas are now coming here for treatment.”

“The same water, animals are standing in it and using it, and now people are using it to wash clothes and dishes and perhaps drinking it as well,” Khoso said, adding that the hospital was facing a “200 percent increase in the number of patients suffering from water-borne diseases.”

Dr. Imran Baloch, a medical superintendent at the hospital, said at least 12 newborn babies were being regularly treated for ARI at the facility, and the number was steadily rising, creating challenges for doctors.

“There used to be 400 patients regularly coming to the hospital but now 900 plus patients are coming [daily],” Baloch said, “so we are having a lot of difficulty in managing them.”

Umar Khan Jamali, a legislator from Jaffarabad district, called the flood “one of the most severe natural disasters in the history of Pakistan,” saying no government was capable of coping with natural catastrophes on this large scale.

“The government of Pakistan and Balochistan have made international calls for assistance but unfortunately we didn’t receive any positive response, particularly in the health crisis that surfaced after the flood,” Jamali told Arab News. “The provincial health department has been utilizing all its available resources to ensure quality health services to the flood affected people.”

Meanwhile, people like Khan and his family wait for help.

“I want my nephew to be treated by senior doctors here,” Khan said, “but due to a large number of patients in the hospital, we are facing delays in medical treatment. Despite sitting outside the OPD for five hours, I am still waiting for my turn to see a doctor.”


As Pakistan’s new finance minister takes over ailing economy, experts keep expectations in check

Updated 30 September 2022

As Pakistan’s new finance minister takes over ailing economy, experts keep expectations in check

  • Ishaq Dar has vowed to rein in inflation, keep currency fluctuation in check via regulatory controls
  • Rupee recoups 4.3 percent in last five trading sessions since government announced Dar’s appointment

KARACHI: As newly appointed Finance Minister Ishaq Dar attempts to tackle Pakistan’s economic crises, financial and business leaders said on Thursday that to believe Dar was a “magician” who would easily rid Pakistan of its ills was an over-optimistic feeling.

Dar took oath as a federal minister on Wednesday, five years after he was ousted from the role by a court in a corruption case.

Dar is a member of PM Shehbaz Sharif’s ruling Pakistan Muslim League-Nawaz (PML-N) party and has already been finance minister four times.

The 72-year-old takes the driving seat of Pakistan’s economy at a time when the South Asian country is struggling to contain a balance-of-payments crisis, faces depleting foreign reserves, high inflation and a weakened currency.

Dar has vowed to rein in inflation, which currently stands at a 47-year high at 27.3 percent. He has also vowed to bring stability to the currency market, where the rupee has been taking a battering against the US dollar in recent months. In a bid to bolster Pakistan’s currency, Dar has also warned currency smugglers and speculators against actions that could weaken the rupee.

On Thursday, the finance minister held a virtual meeting with International Monetary Fund Mission Chief Nathan Porter to assure him Pakistan would undertake reforms envisaged under the deal between the two countries.

He said the government would take measures to reduce the burden on Pakistan’s economy while protecting vulnerable sections of the country’s population.

“Dar is focused on two things; the first being inflation that he wants to keep in check and the second is the interest rate reduction,” Farhan Mahmood, head of research at Sherman Securities, told Arab News.

“That is not his domain but through an inflation cut, it could be achieved,” he added.

Mahmood said Dar aspired to contain currency speculation and hoarding through regulatory controls, adding the new finance minister also wants to bring in proceeds from exporters.

“Around 10-15 percent of textile exporters’ proceeds don’t come to Pakistan. Dar can make some arrangements for early repatriation,” he added.

The impression that the finance minister will be tough on currency hoarders and speculators has left some visible marks. Since Monday, Pakistan’s rupee has been making gains against the US dollar.

The rupee in the interbank market has appreciated by Rs10.08 or 4.32 percent against the greenback during the last five consecutive trading sessions. The gains were witnessed following the coalition government’s decision to replace ex-finance minister Miftah Ismail with former premier Nawaz Sharif’s confidant.

Pakistan’s rupee closed at Rs229.63, up by 1.09 percent on Thursday, the State Bank of Pakistan’s (SBP) figures showed.

Analysts believe measures to bring stability to the currency market and reduction in global prices of commodities would prove to be a favorable outcome for the new finance minister.

“Timing of his arrival is good as the prices of commodities in the international market have declined by 36 percent, including those of diesel and petrol,” Mahmood said. “Even today we estimate that if the exchange rate stabilizes at Rs200, the petrol price that is at Rs237 could [go down to] Rs190 per litter,” Mahmood said.

Samiullah Tariq, Director of Research at Pakistan Kuwait Investment Company, said the situation seems favorable for Dar at the moment. However, he said the future outcomes depended on sustainable actions.

“If actions against currency hoarders and those involved in speculations are materialized, things would be better,” Tariq said. “But this should be on a sustainable basis. However, the global financial conditions have changed which may impact his (Dar) ability to execute performance as compared to the past.”

Pakistan estimates losses from unprecedented floods may go as high as $30 billion, another mounting challenge for the cash-strapped country.

The country’s reserves, in the face of growing pressure from import payments and other factors, have declined to $8 billion.

“Many aspects need attention with an economy in a balance of payments challenges worsened by floods,” Dr. Khaqan Najeeb, former adviser to the Ministry of Finance, told Arab News.

“Building reserves is important to signal external stability and orderly movement in markets. Ensuring multilateral flows in the short run can help in this regard,” Najeeb said. “Constructing a new macro framework is essential as GDP, fiscal and current account estimates have changed after floods,” he added.

“This will form the basis of negotiations with the IMF for reconsideration.”

Pakistani industrialists and business leaders believe Dar faces the daunting task of pulling Pakistan out of its current economic crisis. They said he may not be able to solve the country’s entire problems.

“Keeping in view the long list of Pakistan’s chronic economic problems, if somebody is feeling that Ishaq Dar is a magician, then he or she is “over-optimistic,” Engineer. M. A. Jabbar, Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Arab News.

“We expect ‘Daronomics’ may find some of the answers but not all the answers for the ailing economy of Pakistan,” he added. “External account, inflation and forex market are the key areas where the new finance minister has to enhance his focus.”

Pakistani financial experts believe mobilizing funds for flood relief will remain important, and direct relief to millions affected would be the best way forward.


Beijing says man killed in Karachi shooting in dental clinic not Chinese national

Updated 29 September 2022

Beijing says man killed in Karachi shooting in dental clinic not Chinese national

  • Pakistani police earlier said Chinese-Pakistani dual national was killed in attack
  • Counterterrorism official says Sindhi separatist group claimed attack

KARACHI: China’s foreign minister on Thursday rejected reports that a man gunned down in a dental clinic in Pakistan’s southern port city of Karachi was a Chinese national.  

An armed man, posing as a patient at a dental clinic in Karachi on Wednesday shot dead Ronald Raimond Chao and injured Dr. Richad Hu, 50, and his wife Margaret Hu, 45. Pakistani police said the couple ran the clinic where the incident took place.  

A First Information Report (FIR) lodged at Karachi’s Preedy police station said the victims were Pakistanis of Chinese descent. However, the media reported the deceased and the wounded couple were Chinese-Pakistani dual nationals.  

Deputy Inspector General of Police Counter Terrorism Department (CTD) Asif Aijaz Shaikh also told media Dr. Richard and his wife were dual nationals who were living in Karachi since the last four to five decades.   

“We express condolences for the victim and sympathies to the injured. To my knowledge, the victim you mentioned was not a Chinese citizen,” Wang Wenbin, China’s foreign ministry spokesperson, told media during a press briefing.  

Raja Umar Khattab, head of the Transnational Terrorists Intelligence Group (TTIG) of Karachi CTD, said the attack had been claimed by the Sindhudesh People’s Army militant group. Khattab said he believed the group had been formed recently.  

“Sindhudesh People’s Army is believed to be an alliance of Sindhudesh Revolutionary Army and Baloch National Army. The organization, according to my information, has been formed days before the attack,” he said.  

Chinese nationals have frequently been attacked by separatist groups from Pakistan’s impoverished, southern Balochistan province. Beijing is involved in huge infrastructure projects in Balochistan which are part of its Belt and Road Initiative.  

Pakistani officials have expressed fears in the past of growing links between Sindhi separatists and militant groups from insurgency-racked Balochistan. Sindhi separatists, who want the southern Sindh province to break away from Pakistan's federation, have launched low-intensity attacks against the state over the years.

In April, a female suicide bomber of the Baloch Liberation Army (BLA) group attacked the Confucius Institute at Karachi University. Three Chinese language teachers and their Pakistani driver were killed in the blast.  

Last year, a suicide bomber blew up a passenger bus, killing 13 people. Of these, nine were Chinese nationals working on the Dasu Hydropower project in Pakistan’s northwestern Khyber Pakhtunkhwa province.


Sarah Inam murder: Pakistan investigators to search bank accounts over extortion accusations against suspect

Updated 29 September 2022

Sarah Inam murder: Pakistan investigators to search bank accounts over extortion accusations against suspect

  • Victim’s father says daughter was “trapped” into marriage by Shahnawaz Amir to fleece her out of money
  • Mobile phones of both suspect and victim sent to the Federal Investigation Agency for forensics analysis

ISLAMABAD: A police official who is leading an investigation into the beating death of a Pakistani-Canadian woman allegedly by her husband last week has said investigators had sought the court’s permission to obtain bank records of the suspect to prove accusations he had been extorting his wife.

Sarah Inam, a 37-year-old economist who worked in Abu Dhabi, was murdered with dumbbells, according to police, by her husband Shahnawaz Amir at a suburban Islamabad home last week. Inam got married to Amir of her own choice on July 18 in his hometown of Chakwal. The parents of the couple were not present at the event.

Amir is currently under arrest and being investigated by police.

At Inam’s funeral on Wednesday, her father Inam Rahim said his daughter had been “trapped” into marriage by Amir to fleece her out of money.

“We know the relevant bank account of the suspect in which he was receiving money from her wife Sarah Inam,” Habib-ur-Rehman, who is leading the investigation, told Arab News on Thursday. “The suspect has confessed during the investigation that he received around one million rupees from her wife, but we have yet to corroborate it with the banking transactions.”

Under Pakistani law, police cannot directly access the bank accounts of suspects but need to seek permission from a relevant court.

“We have filed an application in the Islamabad High Court for this,” the inspector said.

Investigators have also seized the mobile phones of both the suspect and the victim and dispatched them to the Federal Investigation Agency (FIA) for forensics analysis.

“The suspect has shared his mobile phone’s password with the police, while experts will open the victim’s phone with the help of certain softwares to look for the relevant information,” Rehman said.

A 1996 model Mercedes car was seized from the home where Inam died, the inspector said, which the victim had paid for but whose ownership was transferred fraudulently to the suspect. Police were also investigating the incident, he added. 

Rehman said the suspect had torn up Inam’s Canadian passport also, which investigators needed for their probe.

“Her passport was torn into pieces, and we have yet to put it together,” he said. “The police would know from Sarah’s passport how many times she traveled to Pakistan after her marriage.”

Rehman said a police team had also visited Chakwal, Amir’s hometown, to verify the couple’s nikah and question witnesses and others who participated in the ceremony.

“The nikah of the couple is verified,” the investigator said. “It was done at the residence of one of Shahnawaz Amir’s friends in Chakwal city.”

Meanwhile, a district court in Islamabad on Thursday extended the custody of Amir for another four days to allow police to complete the investigation. 

No member of Inam’s family or lawyers representing them appeared in the court to plead the case.