Saudi Riyal demand soars 30 percent in Pakistan ahead of Umrah, Hajj season

A man enters a foreign currency exchange shop in Islamabad on July 11, 2023. (AFP/File)
Short Url
Updated 14 February 2024
Follow

Saudi Riyal demand soars 30 percent in Pakistan ahead of Umrah, Hajj season

  • Currency dealers say the spike in demand is managed by adequate supply of the Saudi currency in market
  • Umrah operators say the availability of tickets to Saudi Arabia has become limited ahead of Ramadan

KARACHI: The demand for Saudi Riyal has surged by about 30 percent in the open market due to the seasonal impact of Umrah and Hajj, with currency dealers in Pakistan noting on Wednesday the spike in demand is being managed with sufficient supply of the foreign currency.

A large number of Muslims prefer to perform Umrah in Saudi Arabia during the Islamic fasting month of Ramadan to further deepen their spiritual experience, and the Saudi authorities have been facilitating pilgrims, leading to a massive growth of people flying into the kingdom from different parts of the world.

In January, Saudi Minister for Hajj Dr. Tawfiq Al-Rabiah said the number of Umrah pilgrims arriving in the country last year reached 13.6 million, reflecting a 58 percent increase since 2019.

Speaking to Arab News, Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), mentioned that about 800,000 Pakistanis performed Umrah by the end of Ramadan in 2023, and the number is expected to increase this year.

“We have seen about a 30 percent surge in the demand for Saudi Riyal, mainly due to the aspiring Umrah pilgrims which indicates their number may increase this year,” he explained.

“The spike in demand also comes from those preparing for Hajj this year, as the exchange rate increased last year and many are buying Saudi Riyal in advance,” he added.

Wahab Siddiqui, a member of the executive committee of the Hajj Organizers Association of Pakistan (HOAP), concurred with Bostan, noting the reduced availability of tickets to Saudi Arabia due to the large number of aspiring pilgrims.

“Tickets are not available until March 2024, ahead of Ramadan, indicating that airlines are fully booked compared to last year,” he told Arab News.

The ECAP chairman revealed that the surge in demand for the Saudi Riyal was detected after the export of currency declined to about $20 million from approximately $30 million a month earlier.

“We export about $30 million worth of various foreign currencies to Dubai every month and import US dollars against it,” Bostan said, adding the share of Saudi Riyal in the export was usually about 60 percent.

He assured that the exchange rate would remain stable due to the adequate currency supply in the open market.

Pakistan’s currency dealers surrender US dollars bought from various commercial banks. In January this year, the dealers submitted about $300 million to the banks, according to the ECAP chairman.

“Due to the demand for Saudi Riyal, the volume of foreign currency exports is expected to remain between $12-20 million ahead of Ramadan and Hajj,” he added.

According to ECAP data, the current buying price of the Saudi Riyal in the open market is approximately Rs74.90.


Pakistan to raise special force to guard Balochistan minerals as Barrick reviews Reko Diq project — official

Updated 5 sec ago
Follow

Pakistan to raise special force to guard Balochistan minerals as Barrick reviews Reko Diq project — official

  • Barrick decision follows coordinated separatist attacks in several districts across Balochistan last Saturday that killed over 50 civilians and security personnel
  • Balochistan, which borders Iran and Afghanistan, is the site of a decades-long insurgency by Baloch separatist groups who often attack security forces, foreigners

KARACHI: Pakistan has decided to boost intelligence network and raise a special force to guard the mineral-rich Balochistan province and its borders with Iran and Afghanistan, a provincial government official said on Saturday.

The development comes days after Canadian giant Barrick Mining Corporation said it planned to “immediately” begin a comprehensive review of all aspects of the multibillion-dollar Reko Diq copper-gold project in Balochistan.

Barrick decision followed coordinated separatist attacks by the Baloch Liberation Army (BLA) group in several districts across Balochistan last Saturday that killed 36 civilians and 22 security personnel. Authorities said they had killed 216 militants in follow-up operations.

Mineral-rich Balochistan, which borders Iran and Afghanistan, is the site of a decades-long insurgency waged by Baloch separatist groups who often attack security forces, foreigners and non-local Pakistanis and kidnap government officials.

“In light of the terrorists events, the provincial government in tandem with security forces is redesigning the entire security architecture,” Shahid Rind, an aide to Chief Minister Sarfraz Bugti for media and political affairs, told Arab News.

“This includes raising of dedicated Frontier Corps for the mineral-bearing area, securing both borders i.e. Iran and Afghanistan.”

Arab News reached out to Pakistan’s information minister, Attaullah Tarar, but he did not respond to questions seeking comment on the matter.

The Balochistan government will also beef up intelligence network and work closely with mining companies in the region.

“The Balochistan government is extremely serious about foreign investment in the province and considers Reko Diq as the flag-bearer of foreign investment,” Rind said.

“The provincial government will do whatever is necessary to maintain that.”

The recent attacks have apparently alarmed international investors, especially Barrick, which is developing one of the world’s largest copper and gold mines in Balochistan.

“As we stated in our public documents, Barrick is undertaking a review of all aspects of the Reko Diq project, including with respect to the project’s security arrangements, development timetable and capital budget,” a Barrick spokesperson said in response to an Arab News email.

In a Feb. 5 statement issued with its fourth-quarter financial results, Barrick said the Reko Diq project “continued to advance site works in Q4, although in light of a recent increase in security incidents, management is currently reviewing all aspects of the project.”

“The review will begin immediately,” the Barrick spokesperson said. “An update will be provided when the review has been completed.”

Barrick owns 50 percent share in Reko Diq, along with three Pakistani federal state-owned enterprises that own 25 percent, while the Balochistan government has the remaining 25 percent share in the project.

The project is expected to begin production in 2028 and is central to Pakistan’s hopes of boosting mineral exports and attracting foreign investment into its underdeveloped mining sector. Despite heightened threats in Balochistan, development linked to the project continues in other parts of the country.

Barrick is expected to start investing in Pakistan’s port infrastructure soon as it prepares for exports.

Pakistan International Bulk Terminal Ltd. (PIBT), the country’s first dirty bulk terminal located at Port Qasim in Karachi, will host dedicated facilities to ship Reko Diq’s output.

PIBT CEO Sharique Azim Siddiqui told Arab News this week that Barrick would invest $150 million to build a shed and upgrade other dedicated facilities to handle shipments of copper-gold concentrate once Reko Diq production begins in 2028.

Barrick’s Pakistani subsidiary, Reko Diq Mining Company, last week signed an export agreement with PIBT under which the miner will export 800,000 tons of copper and gold concentrate through the terminal in the first phase, doubling the volume in the second phase, according to Siddiqui.

Revived in 2022 after years of legal disputes, the Reko Diq project is billed by the government as a transformative investment for Balochistan, Pakistan’s largest but least developed province.

But persistent militant activity and rising attacks targeting security forces, state institutions and infrastructure have raised concerns among investors.

The latest separatist attacks, one of the deadliest flare-ups in Balochistan in recent years, have prompted large-scale security operations across the province as authorities continue their hunt for militant facilitators.

Siddiqui said the recent surge in militancy in Balochistan remains a concern for them.

“Security challenges have always been there in Pakistan. The investors do realize that, and we take it in our stride, and we hope for the best,” Siddiqui said.

“If there is no security for the cargo movement, then that’s going to hurt that (Reko Diq) project and hurt everyone.”