Pakistani rupee plummets to all-time low against US dollar at 271.36
Pakistan's rupee declines by Rs2.53 or 0.93% against US dollar, according to central bank data
Pakistani rupee continues free fall after currency dealers removed cap on exchange rate last week
Updated 02 February 2023
Khurshid Ahmad
KARACHI: Pakistan's rupee continued its free fall against the US dollar on Thursday, with the greenback reaching an all-time high of Rs271.36, a week after Islamabad removed artificial controls from its exchange market to secure an International Monetary Fund (IMF) bailout package.
After Pakistan's currency dealers announced removing the exchange rate cap last week, the rupee declined by a massive Rs25 or 9.6% in a single day. With a staggering $3.6 billion in reserves barely enough to cover import payments for a month, Islamabad has agreed to the IMF's tough conditionalities to revive a stalled $7 billion loan program it hopes would lead to more inflows from multilateral organizations and "friendly countries."
The IMF has been pushing Pakistan to remove artificial controls from its exchange market. Experts have warned the rapid weakening of the rupee would usher in an inflationary storm in the country.
On Thursday, Pakistan's central bank shared data on Twitter according to which the rupee declined by Rs2.53 or 0.93%, with the greenback selling at Rs271.36 in the interbank market.
"The Pakistani rupee witnessed pressure and closed at a record low against the U.S. dollar mainly due to less inflows of export proceeds," Zafar Sultan Paracha, general secretary of the Exchange Companies Association of Pakistan, said.
"The country’s political and economic situation also continued to exert pressure on the rupee," he added.
Earlier this week, international credit ratings agency, Finch Ratings, said Pakistan's rupee would further weaken and exacerbate inflation in the country.
Official data showed on Wednesday that Pakistan’s inflation rate surged to 27.6 percent, the highest in over four decades, on a year-on-year basis in January 2023.
“In the near term, it [weakening rupee] could exacerbate imported inflationary pressure, and may eventually result in steeper policy rate hikes from the SOP,” Finch said.
ISLAMABAD: Finance Minister Ishaq Dar reiterated on Saturday that Pakistan would not default despite the economic challenges it was facing, adding the government would come up with new ideas in the weeks to come to steer the country out of the economic crisis.
The South Asian country has for months been struggling with an acute balance-of-payment crisis, with inflation hovering at a record high, currency depreciating fast and foreign exchange reserves at critically low levels.
Pakistan is making desperate attempts for the revival of a $6.5 billion International Monetary Fund (IMF) program that would release a $1.1 billion bailout tranche. The installment has been pending since November and the program is due to expire on June 30, with the government expected to present the federal budget next week.
The stalemate has raised concerns that the country may default on its international financial obligations without the IMF funding. But Dar, in a meeting with a business delegation in Islamabad, assured that Pakistan, as a sovereign country, had assets worth billions of dollars.
“If we have $100 billion in external debts, we also have assets, and one of our assets, the gas infrastructure, alone costs $40 to $50 billion, which is 50 percent of the debt,” he said.
“No one is saying internationally that Pakistan will default, only some pseudo-intellectuals are saying that. In fact, the MD [managing director] of the IMF issued a statement a few weeks back that Pakistan will not default. Their broad discussions center around how is Pakistan surviving.”
Dar said his government would try to come up with new ideas to steer the country out of the present crisis.
“Our main purpose today is just to reassure you, that we will be coming out of [this crisis] and come up with new ideas in the weeks to come,” he said.
“There will be the budget and after that, we will also do things for Pakistan’s long-term betterment.”
Referring to statements by ex-finance czar Miftah Ismail about the country moving toward bankruptcy, Dar said “some people were fond of” predicting dates when the country would default.
“They say the country would default in two to three months. They should be ashamed of themselves,” he added.
Pakistan PM expresses sorrow over loss of hundreds of lives in India train crash
A deadly train crash in the Indian state of Odisha has so far killed nearly 300 people, injured 900 others
Rescuers were cutting through destroyed carriages on Saturday to find people who may still be trapped
Updated 03 June 2023
ARAB NEWS PAKISTAN
ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif on Saturday expressed grief over the loss of nearly 300 lives in one of the deadliest train crashes in India, as rescue workers searched through piles of debris and wreckage for bodies and survivors in the Indian state of Odisha.
Nearly a dozen coaches of one train derailed late Friday and debris from some of them fell onto a nearby track, according to railroad ministry spokesperson Amitabh Sharma. The debris was hit by another passenger train, causing up to three coaches of the second train to derail as well.
More than 288 dead bodies were recovered overnight and around 900 people were injured in the accident in Balasore district, while rescuers were cutting through the destroyed carriages to find people who may still be trapped under the debris.
In his reaction to the tragedy, Pakistan PM Sharif extended his heartfelt condolences to the bereaved families and said he was praying for recover of the wounded.
“Deeply saddened by the loss of hundreds of lives in a train accident in India,” the Pakistan premier said on Twitter. “I extend my heartfelt condolences to the bereaved families who lost their loved ones in this tragedy. Prayers for speedy recovery of the injured.”
Deeply saddened by the loss of hundreds of lives in a train accident in India. I extend my heartfelt condolences to the bereaved families who lost their loved ones in this tragedy. Prayers for speedy recovery of the injured.
Train accidents have not been uncommon in India and Pakistan, where a majority of railway tracks date back to the pre-partition British colonial era and there has been little improvement in the department since their independence in 1947.
A speeding train ran over revellers watching fireworks during a Hindu festival in northern India on October 19, 2018, killing at least 60 people.
In 2016, at least 146 people died when an Indore-Patna Express train with around 2,000 people on board derailed in Uttar Pradesh, sending carriages crashing into each other.
In June 2021, more than 60 people died when a train hurtling through farmland derailed and collided with another passenger service in Pakistan’s southern Sindh province.
Pakistan regulator approves up to 50 percent hike in gas prices
The Oil and Gas Regulatory Authority estimates revenue requirement of $2.4 this fiscal year
The regulator has proposed eliminating distinction between protected and unprotected slabs
Updated 03 June 2023
ARAB NEWS PAKISTAN
ISLAMABAD: Pakistan’s Oil and Gas Regulatory Authority (OGRA) has okayed up to 50 percent increase in gas prices as it calculated an estimated revenue requirement of Rs697.4 billion ($2.4 billion) to be collected from consumers this fiscal year, Pakistani media reported on Saturday, amid record inflation and economic meltdown in the South Asian country.
The South Asian nation has been witnessing an increase in the inflation rate since late last year when the government took prior actions to comply with the conditions set by the International Monetary Fund (IMF) to revive a stalled $7 billion bailout program, stalled since November.
Pakistan reported 38 percent inflation in May on the back of rising food and energy prices and a massive currency devaluation. The Pakistani rupee has devalued by around 30 percent since last June and played a major role in piling up the inflationary pressure.
Gas consumers in the country are likely to witness a potential 50 percent increase in prices starting from July as OGRA concluded its determinations for two struggling state-run gas distributors and submitted them to the government, The News English-language daily reported.
“The Sui Northern Gas Pipeline Limited (SNGPL), responsible for gas supply to consumers in Punjab and Khyber-Pakhtunkhwa (KP), will collect Rs358.4 billion,” the report read.
“The Sui Southern Gas Company (SSGC), which supplies gas to consumers in Sindh and Balochistan, will collect Rs339 billion.”
OGRA determined Rs1,238.68 per 1 million British Thermal Unit (mmBtu) to be the average prescribed price for SNGPL, reflecting a 50 percent increase or Rs415.11 as compared to the existing price, according to the report.
Similarly, the average prescribed price for SSGC was set at Rs1,350.68/mmBtu, representing a 45 percent increase of Rs417.23.
The regulator has proposed eliminating the distinction between protected and unprotected slabs for gas consumers and setting the price at 1238.68/mmBtu.
“This change will result in a significant increase in gas prices for protected low-slab consumers,” the report read further.
“However, two highly gas-consuming slabs will benefit from the new pricing as they were previously paying up to Rs3,100/mmBtu.”
Interestingly, while gas will become more expensive for zero-rated consumers, gas-filling stations, cement and fertilizer plants, power stations, and independent power producers (IPPs) will experience a reduction in gas prices, according to the report. However, the feedstock gas prices for the fertilizer sector will more than double.
The regulator has now suggested a uniform prescribed price of Rs1,238.68/mmBtu for all these categories.
The increase in gas prices is expected to further burden the masses reeling from record inflation in the country, with many saying they have been forced to cut their kitchen spending and focus only on most essential items.
As Pakistan’s Finance Minister Ishaq Dar prepares to present budget for the next fiscal year, financial experts have urged the government to take steps to mitigate the suffering of low-income groups.
KARACHI: A young Pakistani child started sharing life’s fleeting moments on YouTube from the confines of a small room in his multistory residence in Karachi’s Baldia Town neighborhood after discovering that he was suffering from a debilitating disease.
Owais Shehzad, only nine years old, has been battling cancer for the last five years. Despite enduring intensely painful medical treatments, he found solace in dancing and creating videos, portraying himself as any other fun-loving child.
“I could neither eat nor drink, and I lost my hair and eyebrows due to chemotherapy,” he recalled, as he started reflecting on the days of enduring severe cancer treatment that caused mouth inflammation and painful blisters. “I lost my nails. It seemed like I was an alien who had come from another planet.”
“I was half-dead, yet I managed to handle the disease,” he added with a degree of pride. “My eyes sunk deep, and I could neither eat nor drink due to the blisters.”
The still image taken from a video recorded on June 1, 2023 shows Owais Shehzad, a child youtuber from Karachi, Pakistan. (AN Photo)
Owais’s battle with cancer hasn’t stopped since he has been diagnosed with a type of blood cancer in which the harmful pathogens never truly go away. However, the painful treatments he endured over the last five years have kept him alive.
His passion for dance also brought him happiness even in the darkest moments, and he served as an inspiration to fellow cancer patients at the hospital.
“My bone marrow test was done and fluid was drained through an IV injection in my back,” he said. “Even in that situation, I was dancing on the bed... I was motivating children, and they were happy to see me.”
The still image taken from a video recorded on June 1, 2023 shows Owais Shehzad, a child youtuber from Karachi, Pakistan. (AN Photo)
“Not only did it cheer me up, but it also brought happiness to the entire Indus Hospital, the children in the cancer ward, and my parents as well,” he reminisced.
Owais admitted to shedding tears, however, when he closed the door of his room, not wanting his parents to be hurt by his struggles.
He said that the road ahead remained uncertain, though he had always wanted to adopt a joyful and enthusiastic approach to life.
Nadeem Shehzad, Owais’s father and a local journalist, acknowledged that his son’s resilience uplifted the spirits of other parents when they were feeling weak.
“As a father, it was extremely difficult to witness my son in pain,” he told Arab News. “Whenever our strength and spirits wavered, we received a boost by witnessing the spirit and strength of this child.”
He informed that Owais had been diagnosed with B-all type blood cancer, with a recovery ratio ranging from two to five percent, which necessitates constant care to keep him alive.
“While treatment and care can prolong his life, the germs still remain in his body, and without complete care, they can become active at any time,” Nadeem explained, adding that it was also the reason why his son could not continue attending school.
Despite being unable to pursue education in a formal setting due to health issues, Owais’s passion for compels him to wear a school uniform and keep a bag at home.
“I wish to go to school,” he said. “However, my disease is such that I can neither sit nor stand due to the injections.”
Last year, the nine-year-old had one of his longstanding desires fulfilled when he embarked on a journey to Saudi Arabia for the Umrah pilgrimage.
“I had always wished to perform Umrah, to visit the house of Allah and witness His divine abode. Allah granted me an invitation... The experience of Umrah was truly amazing, and now I also aspire to perform Hajj,” he shared with gratitude.
Owais believes that those who remain happy even in sickness bring joy to God as well.
“May Allah grant me a long life, but whatever life I have, I’m living it to the fullest,” he said. “Currently, I am embracing life with utmost spirit and enthusiasm.”
He added that he harbors deep love for both journalism and the army, making his professional destination uncertain in life.
“Let’s see which of these two paths life takes me on,” he smiled.
Dubai-based multinational invests $6 million in Pakistan to acquire home care product manufacturer
UAE’s New Future Consumer International General Trading completes acquisition of Zulfiqar Industries that makes famous Capri Soap in Pakistan
The foreign investor says Pakistan is prioritized as part of its global business development strategy in the FMCG category with strategic partners
Updated 03 June 2023
KHURSHID AHMED
KARACHI: New Future Consumer International General Trading (NFCIGT), a Dubai-based multinational company, has acquired a Pakistani home and personal care product manufacturer, Zulfiqar Industries Limited (ZIL), by injecting around $6 million foreign direct investment (FDI) in Pakistan, officials and a corporate finance adviser familiar with the deal said on Friday.
The NFCIGT is an emerging global fast-moving consumer goods (FMCG) player with business development initiatives in the Gulf countries, Russia, and now in Pakistan with local partners. The company has acquired over 5 million, or 84.84 percent, shares of the ZIL, according to a stock filing on Thursday.
The ZIL, incorporated as a private limited company in 1960, manufactures and sells home and personal care products, including the famous Capri Soap, in Pakistan.
Dr. Cobus Van Rooijen, the founder and managing director of the NFCIGT, said he believed in the long-term growth potential of Pakistan despite challenges.
“Despite the challenging times, we firmly believe in the long-term growth potential of the country,” Rooijen said in a statement on Friday. “We look forward to leveraging our global experience and resources to drive innovation, create employment opportunities, and contribute to Pakistan’s economic growth.”
The NFCIGT chief said his company has prioritized Pakistan as part of its global business development strategy in the FMCG category.
“ZIL Limited has Capri as a fantastic heritage brand, which provides opportunities to expand into other personal care premium categories,” Rooijen said. “We have identified Pakistan as major investment opportunity based on demographics and anticipated consumption per capita growth in key consumer categories.”
Pakistan’s economic landscape has faced numerous challenges, including the global COVID-19 pandemic, and associated economic repercussions, followed by global commodity super-cycle given the Russia-Ukraine war, and the internal political and economic challenges.
However, the new investor remains optimistic about the long-term potential of the Pakistani market and the investment demonstrates their commitment to contributing to Pakistan’s economic development, creating job opportunities, and fostering innovation in the FMCG sector, according to the statement.
The share price of ZIL has increased by 86.6 percent from Rs181.67 per share to Rs339 since January 2023, according to the data available at Pakistan Stock Exchange website.
Alpha Beta Core, a Karachi-based financial advisory and investment banking firm, facilitated the acquisition that marks a significant milestone in the global expansion strategy of investors.
“The acquisition of a Pakistani company by a multinational FMCG player signifies an important milestone at a time when the country is facing economic crisis and needs much needed foreign exchange inflows,” Khurram Schehzad, CEO of Alpha Beta Core, told Arab News.
Schehzad said the acquisition highlights his team’s commitment to delivering exceptional financial advisory services and ability to navigate complex cross-border transactions.
“We are confident that our clients’ investment in the Pakistani market will yield substantial returns and create mutually beneficial partnerships,” he added.
Schehzad said the NFCIGT aims to contribute to the growth and development of the region and countries in which it operates, including Pakistan, .
The NFCIGT chief said he would continue to look for complementary investment opportunities with local partners.
“Our ambitions are to extend to multiple categories in the current countries followed by market entries in other targeted geographies, including Africa and CIS (Commonwealth of Independent States),” he said.
