Central bank rejects claim capping dollar price caused $3 billion losses in exports, remittances

A dealer counts US dollars at a money exchange market in Karachi, Pakistan on January 27, 2023. (AFP)
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Updated 29 January 2023
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Central bank rejects claim capping dollar price caused $3 billion losses in exports, remittances

  • State Bank of Pakistan (SBP) says rising inflation, global economic slowdown behind dwindling remittances, exports
  • SBP says devastating floods last year and ensuing supply disruptions also contributed to decline in Pakistan's exports

ISLAMABAD: The State Bank of Pakistan (SBP) on Sunday rejected media reports which stated that capping the price of the US dollar caused the country losses worth $3 billion in exports and remittances, saying that a decline in both was due to "exogenous factors."

In a major sign that it was willing to swallow the bitter pill and agree to the International Monetary Fund's (IMF) tough conditionalities, Pakistan's foreign exchange companies last week removed the cap on the US dollar. The price of the rupee, as a result, fell to a 24-year-low against the greenback, compounding problems for the South Asian country. 

Local media reports had claimed that capping the price of the US dollar had dealt Pakistan losses of $3 billion in exports and remittances as people preferred to send remittances to Pakistan via illegal channels, which offered a better rate. 

In a press release, the SBP rejected the reports, describing them as "incorrect." It added that Pakistan's exports were facing headwinds due to moderating demand in international markets as the country's trading partners go through a period of monetary tightening. 

"For instance, US Federal Funds rate has surged from 0.25 percent in March 2022 to 4.5 percent to date; suggesting a noticeable global monetary tightening," the SBP said. 

The central bank said inflation has been "significantly higher" in developed countries, eroding people's purchasing power. The SBP also said that devastating floods last year and ensuing supply disruptions are also to blame for Pakistan's dwindling exports. 

"In this backdrop, linking decline in exports to relatively stable exchange rate is not appropriate," it added. 

It said workers' remittances were gradually "tapering off" from the all-time high figure of $3.1 billion in April 2022 due to Eid-related flows.  

"This decline is primarily attributed to global economic slowdown as higher inflation in developed countries has led to higher cost of living abroad, thus reducing the surplus funds that could be sent back to homeland as remittances," the central bank added.

Pakistan's foreign reserves have dipped to an alarming eight-year low of $3.6 billion, barely enough to cover three weeks of imports. Islamabad hopes the resumption of the IMF's stalled loan program would help unlock inflows from allies and multilateral organizations.


Pakistan announces $250 million investment by Abu Dhabi Ports over 10 years in Karachi

Updated 19 July 2024
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Pakistan announces $250 million investment by Abu Dhabi Ports over 10 years in Karachi

  • Senior company delegation briefs PM Sharif on plans to upgrade the container terminal facility
  • The improved infrastructure will help the docking of ships carrying up to 120,000 tons of cargo

ISLAMABAD: Abu Dhabi Ports Pakistan will invest $250 million in the country over a period of ten years, an official statement announced Friday, as it plans to build an advanced port facility in the country’s seaside metropolis of Karachi.
Last year in May, the leading maritime and logistics provider based in the United Arab Emirates, signed a memorandum of understanding with the Karachi Port Trust to construct a premier transshipment hub in the city.
The Pakistani officials expressed hope at the time that the UAE company would help transform Karachi Port into a world-class maritime facility.
“Abu Dhabi Ports Pakistan will invest $250 million in Karachi Port over the next ten years,” said an official statement released after a high-level delegation of the company called upon Prime Minister Shehbaz Sharif.
“A state-of-the-art, fully-equipped multipurpose terminal, being constructed with an investment of $130 million, will be completed in the next two years,” it added while quoting from a briefing given by the delegation members.
The statement said the company wanted to improve container terminal facilities at the Karachi Port by installing automated gates, an additional 200 meters of berth extension and crane rail tracks.
“The construction of new infrastructure at the terminal will allow the docking of ships carrying up to 120,000 tons of cargo, thereby increasing economic activities at the port,” it continued.
The prime minister hoped digital technology and modern machinery would improve the management of goods and containers at the port.
He also directed the authorities to improve the container system to minimize the clearance time.
“The agreement with Abu Dhabi Ports aims at transparency, increased efficiency, and improved port operations,” he was quoted as saying.
He assured the UAE company of his government’s full support regarding the implementation of Pakistan’s agreement with it to maximize its benefits.
The prime minister also instructed railway officials to provide freight wagons and necessary rolling stock to make the project operational and enhance cargo transportation from the terminal.


US calls for media safety following journalist’s killing in Pakistan’s northwest

Updated 10 min 14 sec ago
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US calls for media safety following journalist’s killing in Pakistan’s northwest

  • Malik Hassan Zaib was fatally shot by unknown gunmen on motorbike in KP’s Nowshera city
  • State Department says journalists should be allowed to carry out their duties worldwide

ISLAMABAD: The US State Department on Thursday emphasized the importance of journalist safety worldwide while commenting on the killing of a Pakistani reporter in the northwestern Khyber Pakhtunkhwa province by unidentified gunmen last week.
Malik Hassan Zaib, who was fatally shot by unknown people on a motorbike in KP’s Nowshera city, was the eighth journalist to be killed in Pakistan in the ongoing year.
His assassination was condemned by press freedom organizations that maintained it highlighted the increasing dangers faced by journalists in the South Asian state.
Asked about the development during the State Department media briefing, the principal deputy spokesperson, Vedant Patel, said it was vital for journalists to be able to carry out their responsibilities anywhere in the world.
“Journalists need to be protected and they need to be allowed to do their jobs, whether that be the United States, whether that be Pakistan, whether that be in the Gaza Strip,” he said. “That is something that we feel strongly, and it’s something that is deeply personal to the Secretary [Antony Blinken].”
“It’s obviously personal to us and this team having – spending most of our days engaging with you all,” he continued. “But simply put, journalists need to be protected and need to be able to do their jobs.”
The Pakistani correspondent’s death also prompted New York-based Committee to Protect Journalists to urge the Pakistani authorities to deal with the “horrifying wave of violence” against the media.
It also asked the government to bring the perpetrators of the crime to justice.
“The continued impunity for those who attack journalists is creating an atmosphere of fear and intimidation in Pakistan, which prevents the practice of free and independent journalism,” it added.


Pakistan forms committee to identify businesses supporting Israel as religious party calls off sit-in

Updated 19 July 2024
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Pakistan forms committee to identify businesses supporting Israel as religious party calls off sit-in

  • TLP supporters staged a pro-Palestine sit-in at Faizabad Interchange connecting Rawalpindi and Islamabad last Saturday
  • They asked the government to declare Israeli PM ‘a terrorist’ and send more food and medical supplies to Gaza Strip

ISLAMABAD: The Pakistan government has announced the formation of a committee to identify companies financially supporting Israel’s war in Gaza and recommend banning their products, according to a close aide to Prime Minister Shehbaz Sharif on Friday.
Rana Sanaullah, the PM’s political adviser, shared the decision after negotiating an end to a sit-in by the religious group Tehreek-e-Labbaik Pakistan (TLP), which was demanding an official ban on such products and increased food and medical assistance to Palestinians.
The TLP, which also asked the government to declare Israel’s Prime Minister Benjamin Netanyahu “a terrorist,” called off its week-long sit-in after reaching an agreement with the government, as shared by the information ministry.
“Israel has emerged as a terrorist state and Netanyahu has committed war crimes,” Sanaullah said in a news conference in Islamabad after the TLP agreement. “Pakistan’s prime minister has condemned this in strong words during the Shanghai conference and Pakistan government will continue to condemn this on every forum, using all the possible steps to help Palestinian Muslims.”
“We have also agreed on and will follow it with details that not just Israel, but all the products related to them or those companies who, in any way, directly or indirectly, are involved in this cruelty or assisting that country [Israel] and its forces in any form, will be boycotted and use of their products will be banned,” he continued. “We have formed a committee in this regard, and we will go in detail to find out the companies that might be linked to Israel and if we may be using their products and because of that these forces who are involved in this cruelty are being helped financially.”
Many people in Pakistan have called for a boycott of foreign companies suspected of supporting Israel since the beginning of the war in Gaza.
Social media campaigns and public figures have also voiced support for such a boycott, urging consumers to choose alternative products.
Israel’s has so far claimed at least 39,000 lives, many of them women and children. The casualties have sparked anger and protests worldwide, including in Pakistan, where the country’s civil society and political factions have consistently led pro-Palestine rallies.
The TLP set up its protest camp last Saturday at a busy traffic juncture, the Faizabad Interchange, connecting Rawalpindi and Islamabad.
Known for its hard-line stance on blasphemy laws, the party also staged similar sit-ins at the same spot in the past, significantly disrupting the flow of traffic between the two cities.


Pakistani minister announces plan to bear prisoner repatriation expenses from Sri Lanka

Updated 19 July 2024
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Pakistani minister announces plan to bear prisoner repatriation expenses from Sri Lanka

  • Abdul Aleem Khan’s decision will bring back more than 40 Pakistani prisoners to the country from Sri Lankan jails
  • According to the interior ministry, their release was delayed due to difficulties in meeting the required expenses

ISLAMABAD: Federal Minister for Communication Abdul Aleem Khan has promised to bear the repatriation expenses of Pakistani prisoners in Sri Lankan jails, said an official statement on Friday, making it possible for them to return to their home country by removing a major obstacle.
Pakistan and Sri Lanka agreed to take immediate steps to ensure the return of 43 prisoners in a meeting held between the Sri Lankan High Commissioner, Admiral (r) Ravindra Chandra, and Federal Interior Minister, Mohsin Naqvi, in May.
However, their release had been delayed due to the financial issues.
“Federal Minister for Communications Abdul Aleem Khan has announced to bear all expenses for the repatriation of Pakistani prisoners stranded in Sri Lanka for years,” the interior ministry said in a statement. “These prisoners will now be able to return home soon after completing the necessary procedures.”
The interior minister expressed his gratitude to Khan for taking interest in the matter, applauding his gesture which he said would be “a breath of fresh air for the prisoners and their families.”
According to Justice Project Pakistan (JPP), nearly 14,000 Pakistani citizens are languishing in prisons across the world.
JPP, a local advocacy group, represents vulnerable Pakistan prisoners at home and abroad.


Six killed in suspected militant violence in Pakistan, citizens hold protest rallies demanding peace

Updated 47 min 49 sec ago
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Six killed in suspected militant violence in Pakistan, citizens hold protest rallies demanding peace

  • Policeman was among three people killed in Khyber Pakhtunkhwa, paramilitary soldier killed in Balochistan
  • Protest rally in Bannu came under fire by unidentified suspects, killing two protesters and injuring 24 others

PESHAWAR: Four people, including a policeman and a paramilitary soldier, were killed in suspected militant attacks in Pakistan’s northwestern and southwestern regions on Friday, officials said, while at least two others perished in shooting at a protest rally in the Khyber Pakhtunkhwa (KP) province against the worsening security environment.
KP, which borders Afghanistan, has seen a surge in attacks on security forces, government officials and anti-polio vaccination teams in recent weeks. Attacks have also spiked in the southwestern Balochistan province, home to a decades-long insurgency by separatist fighters.
The shocking surge in daily attacks has unleashed protests in KP’s Bannu and Tank districts, with citizens demanding authorities ensure peace in the two districts that have been worst-hit by the militancy surge. In Bannu in particular, ten soldiers were killed earlier this week when militants attacked a military cantonment.
In a fresh attack on Friday, two people were killed and four others wounded when a bomb targeted a militant commander, Ain Ullah, associated with Mullah Nazeer group, a Pakistan Taliban (TTP) faction, in the South Waziristan tribal district, according to police.
“A bomb exploded near Maulvi Noor Muhammad mosque this morning, leaving two persons dead and four injured,” Fareed Wazir, a police officer in the town of Wana, told Arab News. “It was a planted bomb. Police are investigating the matter to identify the perpetrators.”
Separately, a policeman was killed and two others injured when unidentified gunmen opened fire on a police check-post in the Bhai area of KP’s Mardan district, rescue officials said.
Meanwhile, unidentified gunmen opened fire at a protest rally in Bannu, killing at least two protesters and injuring another two dozen, according to provincial officials.
“At least two persons died and 24 were wounded when all of a sudden firing started during a peace rally by hundreds and thousands of people in Bannu,” KP Public Health Engineering Minister Pakhtoon Yar Khan told Arab News, saying he had “narrowly escaped” the gunfire.
Khan said the recent unrest in Bannu had disrupted businesses, educational institutions and public life, and residents wanted peace “at any cost.”
Arab News tried reaching out to the Bannu district police officer, Ziauddin Ahmad, to get more details of the incident, but he did not return phone calls.
Later, commenting on the development the provincial administration’s spokesperson Barrister Muhammad Ali Saif said in a video statement people had the right to hold peaceful protests, though no one would be allowed to take law into their hands.
He said Chief Minister Ali Amin Gandapur had taken notice of the situation in Bannu and asked the commissioner and deputy commissioner of the region to hold negotiations with protesters.
“After negotiations with the elders, the situation is under control,” the KP spokesperson said. “The chief minister has also announced a package for those killed and injured in the incident.”
He added the incident would be investigated and those responsible for the violence would be punished.
In Tank, hundreds of people continued a two-day long sit-in over the fragile security situation in the district.
Pattu Bhittani, one of the organizers of the protest, told Arab News the residents were “fed up” of frequent militant attacks and living in a state of insecurity.
“Till the acceptance of our demands, which is restoration of peace, the entire district will boycott the polio campaign and hoist black flags on their vehicles and homes as a token of protest,” Bhittani said, warning that the protesters would also block highways if their demands were not met.
Islamabad blames the recent surge in attacks, including the July 15 attack on the army cantonment in Bannu, on militants mainly from the TTP operating out of neighboring Afghanistan. Kabul denies the allegations and says rising violence in Pakistan is a domestic issue for Islamabad.
Pakistani forces were able to effectively dismantle the TTP in a string of military operations in KP’s tribal districts from 2014 onwards, driving most of the fighters into neighboring Afghanistan, where Islamabad says they have regrouped.
Islamabad says TTP leaders have taken refuge in Afghanistan and now run camps there to train insurgents to launch attacks inside Pakistan. The Afghan Taliban rulers say Kabul does not allow militants to operate on its territory.
BALOCHISTAN
In Balochistan, one Frontier Corps (FC) paramilitary soldier was killed and four were injured in an IED blast in the Buleda area of Kech district, officials said.
The IED attack took place as an FC convoy was passing an area called ‘Gili’ some 100 kilometers away from Turbat, Insap Baloch, the head of the paramilitary Levis force in the area, said.
“The security forces have surrounded the area and injured soldiers have been shifted to hospital for medical treatment,” Baloch added.
In another attack, one soldier of the Counter Terrorism Department (CTD) was injured in an explosion that targeted a CTD vehicle in the Pishin district.
With inputs from Saadullah Akhter in Quetta