Pakistan’s currency, stocks remain bearish on flood losses ahead of crucial IMF meeting

A stockbroker monitors the latest share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on June 13, 2022. (AFP/File)
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Updated 25 September 2022
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Pakistan’s currency, stocks remain bearish on flood losses ahead of crucial IMF meeting

  • Pakistani finance minister says government may consider importing vegetables, other edible items from India
  • Analysts say fears of swelling import bill after flood-related crop damages keeping the rupee under pressure

KARACHI: Pakistan’s currency and stocks continued to slide on Monday ahead of a critical meeting of the International Monetary Fund (IMF) executive board to decide the fate of the South Asian country’s $6 billion loan program, analysts and traders said, attributing the bearish market sentiment to massive floods nationwide.

The Pakistani currency depreciated by 0.57 percent as the US dollar closed at Rs221.92 in the interbank market, while the greenback was trading at Rs230.50 for selling in the open market on Monday.

Analysts believe the anticipated impacts of recent floods on the import bill of the country have also played a key role in building pressure on the rupee.

“The pressure on the rupee was also due to the expected imports of food commodities after the recent floods damaged crops in the country,” Samiullah Tariq, a research director at the Pakistan Kuwait Investment company, told Arab News.

The South Asian country has incurred huge human, infrastructural and agricultural losses after the unusually high monsoon rains. While the impact of the calamity is expected to last 30-45 days, the rehabilitation process would take much longer.

“The estimated impact of losses to the economy is around Rs1.2 trillion ($5.3 billion), which is around 1.48 percent of Pakistan’s GDP,” the Karachi-based Arif Habib Limited brokerage firm said in its report on Monday.

“The GDP growth will shrink to 2.49 percent in FY23 against earlier base case assumption of 2.97 percent. Rebound expected next year with GDP to settle at 4.4 percent. Current account deficit to grow by $1.98 billion due to import of food commodities and shrunk exports of textile, rice and sugar given shortage in the country. Inflation to witness further pressure this quarter, settle at 19.7 percent in FY23.”

Pakistan’s finance minister Miftah Ismail has hinted that the country may turn to its eastern neighbor, India, to fulfil its food requirements.

“The government can consider importing vegetables and other edible items from India for the facilitation of people in the wake of destruction of standing crops in Pakistan due to recent floods,” the state-owned Radio Pakistan quoted Ismail as saying at a press conference in Islamabad.

Analysts expect the pressure on Pakistani rupee to ease off after the IMF deal is endorsed by the Fund’s executive board.

“The currency is expected to recoup some of the losses after today’s IMF board meeting which is most likely to approve the seventh and eighth reviews of the loan program,” Tariq said.

The IMF executive board is scheduled to meet today, on Monday, to review the recent staff-level agreement with Pakistan and decide if it wants to disburse $1.17 billion to support the cash-strapped economy of the South Asian country.

An IMF team reached the staff-level agreement with Pakistan on July 13 after carrying out the combined seventh and eight reviews of the country’s $6 billion extended fund facility (EFF). Apart from $1.17 billion from the Fund, Pakistan also seeks further extension of the program until June next year, along with an addition of $1 billion to its overall amount.

Pakistan signed the $6 billion bailout package in 2019, which has been subject to repeated delays due to various reasons. The most recent delay was caused when then prime minister Imran Khan’s government deviated from the program’s objectives and froze energy prices earlier this year. Khan was ousted from power through a parliamentary no-trust vote in April.

The new agreement comes with unpopular belt-tightening measures by the government of PM Shehbaz Sharif, which has effectively eliminated fuel subsidies and introduced new measures to broaden the tax base since taking over the country in April.

At the stock market, the benchmark KSE-100 index regained strength, but closed in the red zone at 42,504 points after shedding 87.17 points on Monday.

“Stocks witnessed bearish activity ahead of the crucial IMF board meeting for the revival of bailout package amid escalating political tensions and investor concerns for flash flood losses hitting $10 billion,” Ahsan Mehanti, chief executive officer (CEO) of the Arif Habib Corporation, told Arab News.


Amid Karachi’s chronic drinking water crisis, hundreds of thousands forced to buy from filtration companies

Updated 13 sec ago
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Amid Karachi’s chronic drinking water crisis, hundreds of thousands forced to buy from filtration companies

  • KWSC study conducted last year showed 90% of water from samples collected across Karachi was unsafe for drinking purposes
  • Impure water has forced people to spend thousands of rupees monthly on filtered water sold by reverse osmosis plants

KARACHI: Hina Mehmood Javed, a mother of three, opened the door to her second-floor apartment in Karachi earlier this week after she heard the familiar cry of ‘pani wala’ [water man] followed by a knock.
Outside, a young man stood with a heavy 19-liter water bottle, which he delivered for a fee to Javed, one among hundreds of thousands of residents in Pakistan’s commercial hub of Karachi who are buying water from plants that use reverse osmosis to separate pollutants.
A Karachi Water and Sewerage Corporation (KWSC) study conducted last year showed that 90 percent of water from samples collected from various places in Karachi was unsafe for drinking purposes, contaminated with E. coli, coliform bacteria, and other harmful pathogens. And that’s when there is water flowing through the city’s water pipes. Most residents are forced to get their water through drilled motor-operated wells (known as ‘bores’), even as ground water in the coastal city tends to be salty, and unfit for human consumption.
The only other option for residents is to either buy unfiltered water from private water tanker operators, who fill up at a network of legal and illegal water hydrants across the city, or buy from RO plants that they visit to fill up bottles or have delivered to their homes.
“We have to buy it [water] from outside and sometimes it happens that when the weekends come or when there are government holidays, and there’s no water at home, we have to use water like gold,” Javed told Arab News as she paid Rs100 ($0.36) for the water bottle, which is delivered daily.
“We have to buy and drink water because clean water is not available to us.”
The chronic shortage of drinking water is caused by a broken distribution system as well as leakages and inefficiency in the system and theft.
Dr. Muhammad Bashir Lakhani, a water and energy expert associated with a company working on the K-4, a major project that aims to address Karachi’s chronic water shortages, said the city’s daily water consumption was around 1,250 million gallons.
The megacity draws its water mainly from the Keenjhar Lake, a man-made reservoir about 150km from the city, which sources it from the Indus River. Through a network of canals and conduits, 550 million gallons of water a day (MGD) is fed into the city’s main pumping station at Dhabeji, most of which, a staggering 42 percent or 235 MGD, is either lost or stolen before it ever reaches consumers, according to KWSB data.
And the water that does manage to reach people’s homes was largely unfiltered and untreated, Dr. Lakhani told Arab News.
“Not only is it not treated but most of the time it is polluted,” he said. “It is mixed with sewage and wastewater flows.”
“FORCED TO BUY WATER”
Many, like Muhammad Adeel, are tapping into this problem of impure water by going into the filtration business, setting up small RO water plants inside their shops or homes to supply filtered water to households.
Adeel, whose plant is located in the city’s old and busy Burns Road neighborhood, explained that his system treated water through seven different processes before it became drinkable.
“It [plant] contains minerals which dissolve in it, making it mineral water,” Adeel told Arab News.
Dr. Lakhani, however, said while water provided by RO plants may be safer to drink compared to piped water, it was still not entirely safe for consumption.
“Most of these RO plants do not follow the required environmental health cleaning sanitization requirements,” he said.
But residents have no choice and there are hardly any neighborhoods in the sprawling metropolis where at least two RO plants are not operating.
“You do the math, there are thousands of plants. If at least five to six workers are working on one plant, then you can calculate how many households are being served by this,” Adeel said. “This is a good source of employment for people.”
Residents too said they had no choice, even though it was unfair to have to pay for water, which was the government’s responsibility to provide.
“We have cut down on many expenses to buy water because survival is impossible without water,” Javed the housewife said.
Dr. Lakhani agreed:
“Ten to fifteen years ago, bottled water was considered to be a luxury. But now every person is forced to buy the water from these water filtration companies.”


Pakistan PM insists on ‘no soft-pedalling’ in response to last year’s May 9 violence

Updated 16 min 40 sec ago
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Pakistan PM insists on ‘no soft-pedalling’ in response to last year’s May 9 violence

  • Mobs targeted military installations and martyr memorials on May 9, 2023, following ex-PM Imran Khan’s arrest
  • Khan’s party says Punjab police have raided houses of its parliamentarians and workers to scuttle peaceful rallies

ISLAMABAD: Prime Minister Shehbaz Sharif said on Thursday there should be “no soft-pedalling” concerning the May 9 violence last year, when mobs targeted government properties, military installations and martyr memorials following the arrest of former premier Imran Khan on graft charges in the federal capital.
Pakistan’s incumbent government, composed of by Khan’s political rivals, has decided to observe the anniversary of the incident under the slogan “May 9, never again.”
Hundreds of people carrying the flags of Khan’s Pakistan Tehreek-e-Insaf (PTI) party came out into the streets following his arrest a year ago and targeted government and military buildings, including the official residence of a senior army officer in Lahore and the General Headquarters in Rawalpindi.
Subsequently, hundreds of PTI workers and leaders were arrested in a state crackdown on charges of involvement in the May 9 protests, and some of them continue to remain behind bars while waiting for their cases to be adjudicated.
“Let not the shadows of lies, hide the light of truth,” the prime minister said in a social media post. “One year ago today, not only were symbols of our national pride and honor attacked, but the sanctity of our sacred homeland was also assaulted.”
“There can absolutely be no soft-pedaling of what happened on #May9 and there can be no absolution for those who orchestrated, supported, and assisted the attempt to damage the foundations of our nation,” he continued. “Love of our country demands nothing less, #May9NeverAgain.”

 
Sharif is also scheduled to chair a special meeting of the federal cabinet and address a special function in Islamabad to pay homage to the martyrs and their families.
Meanwhile, the PTI is organizing gatherings across the country to express solidarity with the jailed former prime minister Khan. The party said the police in Pakistan’s most populous Punjab province raided the houses of its leaders and workers on Wednesday night to scuttle it public events.
“Condemn the Punjab Police crackdown against PTI parliamentarians and activists all across Punjab last night,” Omar Ayub Khan, leader of opposition in the National Assembly, said on social media. “9th May 2023 was a ‘False Flag Operation’ against PM Imran Khan and PTI.”
“Regardless of the crackdown, peaceful rallies and protests will be held across Pakistan in the morning,” he added.


Karachi pilgrims utilize Makkah Route Initiative for first time as Pakistan initiates Hajj flights

Updated 22 min 26 sec ago
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Karachi pilgrims utilize Makkah Route Initiative for first time as Pakistan initiates Hajj flights

  • The first flight carrying 180 pilgrims took off from Karachi’s Jinnah International Airport on Thursday
  • This year, about 179,210 Pakistanis will perform pilgrimage under government and private Hajj schemes

KARACHI: Pakistan launched its Hajj flight operation on Thursday, with two private airlines departing from Karachi’s Jinnah International Airport, marking the start of a month-long special air service to transport pilgrims to Saudi Arabia under the Makkah Route Initiative.
The initiative, launched by Saudi authorities in collaboration with several Muslim-majority countries, enables pilgrims to complete the immigration process in their home country, allowing them to bypass these procedures upon arrival in the kingdom.
Pakistan joined the initiative in 2019 as part of a pilot program that started in Islamabad. Its success led to plans for the program’s expansion to other cities, with pilgrims from Karachi benefitting from it for the first time this year.
The first Airblue flight carrying 180 pilgrims departed at approximately 2:18 AM, while the second, operated by Air Sial with about 155 pilgrims onboard, left at around 2:45 AM from Karachi.
“Alhamdulillah, our first Hajj Flight PF754 departed a while ago from Karachi to Madinah which marks the commencement of our Hajj Operation 2024,” AirSial proclaimed in a social media post.


Earlier this week, a group of 44 Saudi officials arrived in Karachi to carry out immigration procedures under the Makkah Route Initiative for Hajj pilgrims.
As part of the month-long pre-Hajj operations starting this week, 11 flights will arrive in Madinah on Thursday from five major Pakistani cities, transporting about 2,160 pilgrims.
Pilgrims from Islamabad, Karachi, Lahore, Multan and Peshawar will be flown to Prince Mohammad Bin Abdulaziz International Airport in Madinah, marking a significant influx of devotees.
Five airlines – Pakistan International Airlines, Saudi Airlines, Airblue, Serene Air and Air Sial – will operate 259 flights to ferry pilgrims from eight major cities in Pakistan, including Islamabad, Karachi, Lahore, Peshawar, Multan, Quetta, Sialkot and Sukkur, to Jeddah and Madinah under the government scheme.
Upon arrival, Pakistani pilgrims will be received by officials at the Pakistan Consulate General and the Hajj Mission of the Ministry of Religious Affairs.
For the first 15 days, all flights will depart from various Pakistani cities to Madinah, continuing until May 23. Thereafter, flights will switch to King Abdulaziz International Airport in Jeddah until the completion of the pre-Hajj operation.
This year, around 179,210 Pakistanis will perform Hajj under both government and private schemes.
Hajj, one of the five pillars of Islam, requires every adult Muslim who is financially and physically able to undertake at least once in their lifetime a pilgrimage to the holy Islamic sites in Makkah and Madinah.


Pakistan prepare for Ireland series as visa delays put Amir’s participation in doubt

Updated 09 May 2024
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Pakistan prepare for Ireland series as visa delays put Amir’s participation in doubt

  • Pacer Mohammad Amir did not leave with Pakistan’s cricket team for Dublin on Tuesday due to visa delays
  • Pakistan will play three T20Is against Ireland from May 10-14 before traveling to UK for a T20I series against England

ISLAMABAD: The Pakistan cricket team will hold their first training session today, Thursday, in Dublin for an upcoming three-match T20I series against Ireland, with star pacer Mohammad Amir’s participation in the series doubtful due to visa delays.
Left-arm fast bowler Amir, a permanent resident of the United Kingdom, applied for an Ireland visa along with the rest of the Pakistan side, according to a PCB official. However, while the rest of the squad received visas before their travel to Dublin on Tuesday, Amir did not and remained in Pakistan, cricket website ESPNcricinfo said.
The website reported that the PCB is in contact with Cricket Ireland over the issue. Pakistan play three T20Is against Ireland from May 10-14. Given the short duration of the tour, it seems unlikely Amir would be able to feature in the series.
“Pakistan cricket team will hold their first training session in Dublin tomorrow [Thursday],” the PCB said in a statement on Wednesday. “The first T20 match between Ireland and Pakistan will be played on May 10.”
Amir, 32, came out of retirement last month and was selected to play against New Zealand in a five-match T20I series. Together with pacers Naseem Shah, Shaheen Shah Afridi and Haris Rauf, he would add strength to Pakistan’s bowling lineup as it gears up for the ICC T20 World Cup 2024.
The mega event will be held for the first time in the US and the West Indies in June. Pakistan will travel to the UK from May 22-30 to play against England.
The South Asian country are one of the favorites to lift the cup, though their performance has dipped somewhat in the shortest format of the game recently.
Pakistan lost 4-1 to New Zealand in an away series in January under then-captain Shaheen Shah Afridi. After Babar Azam was reappointed Pakistan’s captain, the green shirts managed to draw a home series 2-2 against a second-string New Zealand side last month.


Pakistani forces kill 6 militants in volatile northwest near Afghanistan— army

Updated 08 May 2024
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Pakistani forces kill 6 militants in volatile northwest near Afghanistan— army

  • Pakistani security forces carry out twin raids in Dera Ismail Khan, North Waziristan districts
  • Such operations are often conducted against Pakistani Taliban or Tehreek-e-Taliban Pakistan group

PESHAWAR, Pakistan: Pakistani security forces killed six militants in twin raids Wednesday targeting their hideouts in the country’s volatile northwest region bordering Afghanistan, the military said.

Five militants were killed in the first raid in Dera Ismail Khan district in Khyber Pakhtunkhwa province, the military said in a statement. It did not provide further details about the slain insurgents, and only said the men were behind various previous attacks on the security forces.

Another militant was killed in the second raid in a former stronghold of the Pakistani Taliban in the North Waziristan district in the northwest.

The statement did not provide any further details about the identity of the slain men.

Such operations often target the Pakistani Taliban, which has been emboldened by the Taliban takeover of Afghanistan in 2021. Known as the Tehreek-e-Taliban Pakistan or TTP, it is a separate group but a close ally of the Afghan Taliban.