Pakistani rupee gains 2.3% as Ishaq Dar, favoring strong currency, poised to become finance minister

A foreign currency dealer counts US dollars at a shop in Karachi on May 19, 2022. (AFP)
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Updated 27 September 2022

Pakistani rupee gains 2.3% as Ishaq Dar, favoring strong currency, poised to become finance minister

  • Ishaq Dar takes oath as senator, expected to take charge as finance minister on Wednesday
  • Rupee gained by Rs3.11 or 1.33 percent to close at Rs233.91 against greenback in interbank market

KARACHI: Pakistan’s national currency on Tuesday gained 1.33 percent against the United States dollar after Prime Minister Shehbaz Sharif’s aide, Ishaq Dar, returned to the country from London to take over as finance chief, with analysts and traders expecting he would help stabilize the currency and tame record-high inflation.

The rupee gained by Rs3.11 or 1.33 percent to close at Rs233.91 against the greenback in the interbank market on Tuesday. The rupee has recouped Rs5.74 or 2.3 percent during the last two consecutive trading sessions following the nomination of Dar, known to favor a strong currency, as finance minister.

Dar on Tuesday took oath as a senator, a day after he landed in Pakistan from London where he has lived in self-imposed exile for five years.

Dar is a member of PM Sharif’s ruling PMLN party and has already been finance minister four times. Dubbed Daronomics, his approach kept the rupee stable between Rs98 and Rs105 against the greenback during his last stint in office from 2013-2017 but he was also widely criticized for deliberately undervaluing the rupee by pumping dollars in the market. 

“The arrival of Dar has changed the sentiments in the currency market and many people think that he would take punitive actions against the speculators,” Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), told Arab News. 

“Dar has a track record of keeping the rupee stable and a history of improving the economy of the country as well. Many believe that the currency would further strengthen in the coming days.”

Pakistan’s currency has lost its value by 6.48 percent during the current month and has depreciated by 24.54 percent since January this year as demand for imports exerted pressure on the rupee. 

A Pakistani anti-corruption court declared Dar an absconder after the veteran politician, who is a close aide to three-time Prime Minister Nawaz Sharif, failed to turn up for several court hearings in 2017. Dar, who has pleaded not guilty to charges he amassed wealth beyond known sources of income, said he was receiving medical treatment in London and unable to return.

The charges against Dar followed an investigation into the finances of former PM Nawaz Sharif, who was ousted in July 2017 after the Supreme Court disqualified him for not declaring a small salary from his son’s off-shore company.

Both Dar and Nawaz deny any wrongdoing.

During his stint as finance minister from 2013-2017, Dar was initially lauded for steering Pakistan out of a balance of payments crisis in 2013 and returning the nuclear-armed country toward a higher growth trajectory.

But in the year before he stepped down as finance minister after Pakistan’s Supreme Court disqualified him from office, Dar faced widespread criticism for his refusal to allow the rupee to weaken to ease macroeconomic pressures. He was also accused of eroding the central bank’s independence.

Dealers said assurances from the World Bank, the International Monetary Fund and Asian Development Bank that they will not abandon Pakistan in the aftermath of recent floods has played a positive role in the rupee’s appreciation. 

Pakistan’s stocks also continued the previous day’s positive momentum on the arrival of Dar as well as a declining trend in global commodity prices, anticipation of financial assistance from global institutions for flood relief, and strengthening of the Pakistani rupee against the US dollar.

“Bullish activity continued led by scrips across the board ahead of a new finance minister likely to take oath tomorrow [Wednesday],” Ahsan Mehanti, CEO of Arif Habib Corporation, said.

The benchmark KSE100 index gained 367 points to settle at 41,518, after profit taking kicked-in during the mid session.

“Rupee recovery, surge in global crude oil prices , speculations over likely support receipts from WB and ADB for flood loss relief and expectations over FATF [financial watchdog] for exit from gray list next month played a catalyst role in bullish close,” Mehanti added.

Pakistan posts highest current account surplus in 11 months, sees 95% improvement

Updated 13 sec ago

Pakistan posts highest current account surplus in 11 months, sees 95% improvement

  • Experts attribute improved current account situation to growth in remittances and increase in exports
  • Pakistan’s IT exports also shot up in April, with local firms branching out in the Middle Eastern market

KARACHI: Pakistan recorded its highest current account surplus in April after a span of nine months, driven by increased remittances and exports that collectively improved the current account situation by 95 percent in the ongoing fiscal year, according to data released by the central bank on Friday.
The country posted a monthly current account surplus of $491 million last month, the highest since June 2023. During the first 10 months of the current fiscal year (10MFY24), the country’s deficit decreased by 95 percent on a year-on-year basis to $202 million. This was in marked contrast to a deficit of $3.92 billion recorded in the corresponding period last year, as per the data released by the State Bank of Pakistan (SBP).
“Pakistan’s current account improvement was mainly driven by an increase in remittances, month-on-month export growth, along with a decline in imports,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News.
Pakistan received $2.8 billion of workers’ remittances in April 2024, which is 27.9 percent higher on an annual basis. The total inflow of remittance stood at $23.8 billion in the 10-month period of FY24.
“The remittance inflows are mainly due to the upcoming Eid Al-Adha,” Abbas said, referring to a Muslim festivity that follows the Hajj pilgrimage in Makkah. “This is the major contributor to the overall current account improvement.”
The central bank statistics show the monthly information technology (IT) exports from Pakistan increased by 62 percent on an annual and one percent on a monthly basis in the month of April to $310 million.
“This is the highest ever export number in a single month, with the previous highest of $306 million recorded in March 2024,” Topline Securities, a Karachi-based brokerage firm, said in its report issued on Friday.
The monthly IT exports in April are higher than the last 12-month average of $245 million, the brokerage firm added.
The growth in IT exports is due to the expansion of local companies in the Gulf market, especially Saudi Arabia, a relaxation of the permissible retention limit by the SBP from 35 percent to 50 percent in the exporters’ specialized foreign currency accounts, allowing them greater control over their earnings, and stability in the national currency, according to Topline Security.
All of these factors have encouraged IT exporters to bring a higher portion of profits back to the country, it added.
The cumulative IT exports in the first 10 months of the fiscal year increased by 21 percent on an annual basis, reaching $2.59 billion, compared to $2.14 billion recorded in the corresponding period last year. The net IT export number in April is also higher than last 12-month average of $214 million.
The central bank released data on foreign direct investment (FDI) as well that hit $359 million, up 172 percent on a yearly and 39 percent on a monthly basis in April.
This is the highest monthly inflow in nearly four and a half years. The major FDI inflow of $177 million came from China. During the first 10-month period of the ongoing fiscal, the net FDI inflow increased by eight percent on an annual basis to $1.45 billion compared to an inflow of $1.35 million in the corresponding period last year.

Punjab administration orders shortened school hours due to looming heatwaves

Updated 17 May 2024

Punjab administration orders shortened school hours due to looming heatwaves

  • A notification orders schools to ensure all fans are in working condition and water coolers available
  • Provincial government has also announced summer vacation for all schools from June 1 to August 14

ISLAMABAD: The provincial administration of Punjab announced on Friday it would cut short the usual timings of all public and private schools for the rest of the month amid rising temperatures and warnings from the Meteorological Department of impending heatwaves in the coming weeks.

Just a day earlier, the Met Department warned that a major heatwave was set to engulf much of the country next week, with daytime temperatures expected to rise four to six degrees Celsius above the average.

It also predicted dust storms and heavy rains in various parts of Pakistan, including Punjab.

“In the wake of severe weather, it is hereby notified that following School timings shall be observed in all Public and Private Schools in the Province of Punjab with effect from 18th May to 31st May, 2024,” said a notification circulated by the provincial education department, showing 7 AM as the starting time and 11:30 AM as the finishing hour.

It instructed the schools to end classes at 10:30 AM on Friday and Saturday.

The notification also instructed the school authorities to ensure that all fans were in working condition, water coolers were available and no student was made to sit in uncovered and open spaces like lawns in summer season.

Another notification also announced that all the schools in the province will remain closed from June 1 to August 14 for summer vacation.

“All schools in the province shall reopen with effect from Thursday 15th August, 2024,” it added.

In recent years, Pakistan has experienced extreme weather patterns, including unprecedented rains, flash floods, droughts and heatwaves.

Experts attribute these erratic weather patterns to climate change, placing Pakistan among the ten countries most vulnerable to its impacts.

Pakistan’s army chief vows full support for hockey team after silver medal win in Malaysia

Updated 17 May 2024

Pakistan’s army chief vows full support for hockey team after silver medal win in Malaysia

  • The national hockey team reached the Sultan Azlan Shah Cup final for the first time in 13 years
  • The Pakistani players were also hosted and praised by Prime Minister Shehbaz Sharif this week

ISLAMABAD: Pakistan’s army chief General Asim Munir vowed on Friday to fully support the national hockey team while meeting with its players and applauding them for winning a silver medal in the recent Sultan Azlan Shah Cup in Malaysia.

A day earlier, Prime Minister Shehbaz Sharif also hosted the Green Shirts in Islamabad in recognition of their outstanding performance at the tournament, where they reached the finals for the first time in 13 years.

Sharif praised the team’s performance and reiterated his administration’s commitment to promoting sports, particularly hockey, in the country.

The army chief also praised the squad during the interaction with its players in Rawalpindi.

“The hockey team has brought immense pride to the nation, and we are committed to providing them with comprehensive support to ensure their continued success,” he was quoted as saying in a statement released by the military’s media wing, ISPR.

He also extended his best wishes to the players for their future endeavors.

Cricket has generally overshadowed other sports in Pakistan, including hockey, in terms of popularity and media attention.

This is despite the fact that hockey is the country’s national sport and has a rich history of international success. Yet, it has not received the same level of sustained interest or investment as cricket, with the disparity impacting its development and visibility within the country.

England captain Buttler buoyed by return of ‘superstar’ Archer ahead of Pakistan series

Updated 17 May 2024

England captain Buttler buoyed by return of ‘superstar’ Archer ahead of Pakistan series

  • Injuries have blighted Jofra Archer and he has not played top-level cricket for the past year
  • Buttler says he relies on Archer who has a trick up his sleeve in every cricket tournament

LONDON: England white-ball captain Jos Buttler is glad to see “proper superstar” Jofra Archer back in action following the fast bowler’s wicket-taking return to action for Sussex’s 2nd XI.

Injuries have blighted Archer’s international career and he has not played top-level cricket for the past year.

England, however, have recalled Archer for the defense of their T20 World Cup title in the United States and the West Indies next month, with the paceman also selected for the upcoming warm-up series against Pakistan.

Archer continued his build-up to the four-game series against Pakistan by turning out for Sussex’s second string on Friday.

He was parachuted into the match on day four, taking the new ball and returning figures of 1-11 in six sharp overs in Kent’s second innings at Beckenham.

The 29-year-old, previously playing domestic cricket in his native Barbados, hit home opener Ekansh Singh on the helmet and then had him caught in the slips.

Archer will join the England squad in Leeds ahead of the first Twenty20 international against Pakistan at Headingley on Wednesday.

Buttler, who returned early from the Indian Premier League to oversee England’s World Cup preparations, told Britain’s Press Association news agency: “It’s a huge encouragement for him to be back and see him ready to play.

“Everyone knows what he is capable of and the attitude he possesses. As a captain he is someone you can always turn to in a game because he always has a trick up his sleeve.

“It’s great to be able to call on him but it’s important to manage expectations. He has been out of it for a while now so we will need to look after him and realize that it might just take him a little while to be the Jofra of 2019.”

Dynamic batsman Buttler added: “He is a proper superstar but we do have to be smart with him. It’s a jump in intensity from what he’s doing now to international cricket and you can’t really replicate it.”

Leading fintech outlines vision for affordable remittances for Pakistani users at Dubai summit

Updated 17 May 2024

Leading fintech outlines vision for affordable remittances for Pakistani users at Dubai summit

  • Unencumbered by traditional banking infrastructure, top JazzCash official sees fintechs offering greater financial inclusion
  • Murtaza Ali says women already constitute 30 percent of JazzCash customers and 17 percent of its lending users

KARACHI: The top official of a leading Pakistani fintech told a summit in Dubai on Friday financial platforms offered by companies like his could boost remittances to the country, making these transfers more affordable and remotely accessible while making the platforms pivotal for millions of local households.

JazzCash, a mobile wallet and branchless banking service provided by a major telecom operator in Pakistan, was originally launched as “MobiCash” in 2012 before it was rebranded four years later.

Earlier this week, it announced a partnership with the United Arab Emirates-based financial service provider, du Pay, for smooth cross-border payments, saying the collaboration, powered by Western Union, would allow Pakistani nationals to send money directly to JazzCash mobile wallets.

According to a statement issued by the company, the JazzCash head, Murtaza Ali, spoke about the financial inclusion provided by fintech organizations while discussing their impact on the country’s economic landscape.

“Detached from traditional limitations like bank branches and agent networks, digital remittances can reach even remote, low-income households, empowering them to participate in the formal financial system,” he told the participants of the Dubai summit.

The Gulf nation hosts a vast Pakistani expatriate community and holds the distinction of being the second-largest contributor of remittances to Pakistan after Saudi Arabia, with $548 million transferred to the South Asian country in March.

Ali also revealed that women constituted 30 percent of JazzCash customers, 17 percent of lending users, 23,000 merchants and 6,000 agents.

“These encouraging numbers reflect the company’s ongoing commitment to enhancing female participation in its services,” he added.

The statement informed he also praised Pakistan’s central bank, telecom authority and financial regulatory agency for their collaborative approach that propelled digital and financial inclusion across the country.

“With a large unbanked population and a cash-dependent SME [small and medium enterprise] sector, we anticipate exponential growth,” it quoted Ali as saying. “Our roadmap involves leveraging data for risk assessment, venturing into Insurtech, and further integrating financial services into everyday transactions.”