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IMF tranche takes reserves to 22-month high | The Express Tribune

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KARACHI:

Pakistan’s foreign exchange reserves, held by the central bank, hit a 22-month high at $9.12 billion, surpassing the International Monetary Fund (IMF)’s projection for the end of June 2024.

The surge in reserves, however, failed to prop up the Pakistani rupee as the currency nominally weakened Rs0.10 and closed at Rs278.20/$ in the inter-bank market on Thursday. The reserves data was released after the currency market closed for the day.

According to the State Bank of Pakistan (SBP)’s latest weekly update, the foreign currency reserves got a boost of almost 14%, or $1.11 billion, in the week ended May 3, 2024, following the release of the IMF’s last loan tranche. The reserves jumped up close to the July 15, 2022 level of $9.33 billion.

The IMF had projected in March 2024 that Pakistan’s foreign exchange reserves would increase to $9.1 billion by the end of current fiscal year on June 30, 2024.

The central bank said on Thursday that during the week ended May 3, 2024, the SBP’s reserves rose $1,114 million to $9,120.3 million, mainly due to the receipt of $1.1 billion from the IMF as a final tranche under the standby arrangement (SBA).

With the rise in reserves, the country’s import cover has widened to 1.72 month, according to AHL Research.

Pakistan has received a total of $3 billion under the nine-month SBA, which ended in April 2024. It has formally applied to the IMF for a new, three-year loan programme of $6-8 billion.

High officials including Finance Minister Muhammad Aurangzeb and SBP Governor Jameel Ahmad have projected that the reserves would reach near $10 billion by the end of June. The reserves held by commercial banks increased $28.6 million in the week under review, standing at $5.34 billion. Total reserves rose $1.14 billion to a 19-month high at $14.46 billion, according to the central bank.

Pakistan has managed to reach the reserves level set by the IMF weeks ahead on the back of robust inflows of workers’ remittances and an uptick in export earnings.

Remittances hit almost two-year high near $3 billion in March 2024 as non-resident Pakistanis sent more money to their family members back home to help them cope with high inflation during Ramazan and Eid festival, which fell in March-April 2024.

Reports suggest the central bank has bought $5 billion from the domestic market so far in the current fiscal year. Higher supply of the greenback compared to its thin demand provided an opportunity to the bank to absorb the surplus and boost the country’s reserves.

Rupee drops

Market talk indicates that exporters slowed down dollar sales on forward currency counters during the day, leading to a slightly higher greenback demand compared to its supply.

Dealers, however, did not give high importance to the nominal depreciation of Rs0.10. They anticipated that the currency would continue to trade in a narrow band with hopes it would remain stable near current levels till the end of June 2024. The currency has cumulatively appreciated 10.39%, or Rs28.90, in the past eight months since reaching the record low close of Rs307.10/$ in the first week of September 2023.

Published in The Express Tribune, May 10th, 2024.

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Pakistan

Pakistan, Russia plan to establish new steel mill in Karachi – Pakistan Observer

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ISLAMABAD – The government is considering a proposal to establish a new steel mill in Karachi with Russian cooperation and the both countries agreed to form working groups to move forward on the project.

In this regard, Deputy Minister of Industry and Trade Russian Federation Aleksei Gruzdev met with Minister for Industries, Production and National Food Security Rana Tanveer Hussain.

The minister informed that the government has earmarked 700 acres land of Pakistan Steel Mills for establishing a new steel mill. He said despite being blessed with considerable reserves of iron ore (estimated reserves of 1887 million tons), Pakistan is forced to import around $2.7 billion of iron and steel.

There is perpetual gap between domestic production and demand of iron and steel. For the last year, the gap is estimated at 3.1 million tons, he added.

Pakistan’s per capita steel consumption level is below even those of developing countries indicating significant growth potential over medium and long term.

He said efficiency of Pakistan’s steel industry is limited as it segmented (600 small units) and based on old inefficient technology.

The proposed site is located at Karachi and in closed to Port Qasim that reduces cost of transportation of raw materials.

Pakistan’s industrial and agricultural experts are set to visit Russia, marking a significant step in strengthening bilateral ties between the two nations. During the meeting, they emphasized on balance trade between both countries.

Rana Tanveer stressed the need for modern agricultural machinery to boost crop yields and enhance agricultural productivity.

He said the government will provides all the facilities to the Russian investor in the country. Aleksei Gruzdev said that his country will provide modern agricultural machinery to Pakistan in order to boost crop yields and enhance agricultural productivity across the country.

The meeting was attended by deputy trade representative of the Russian Federation in Pakistan Denis Nevzorov, secretary for industries and production Saif Anjum, secretary national food security and research Ali Tahir, additional secretary national food security Amir Mohyudin, deputy chief industries and production Abdul Samad and Executive Engineer PSM Engr. Muhammad Shoaib.

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Anti-money laundering watchdog urges India to speed up prosecutions

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A customer hands Indian currency notes to an attendant at a fuel station in Mumbai, India on August 13, 2018. — Reuters

 NEW DELHI: Financial Action Task Force (FATF), the global anti-money laundering watchdog, urged India on Thursday to accelerate its prosecutions in financial fraud cases. 

FATF, a 40-member task force, in a report has rated India “moderately” effective on its parameter of “money laundering investigation and prosecution”, further adding that the country was compliant in most areas. 

The task force sets global standards for national authorities cracking down on illicit funds generated through drug trafficking, illegal arms trade, cyber fraud and other serious crimes.

India became a member in 2010. In its report the task force said the country was “compliant” and “largely compliant” on 37 out of 40 parameters evaluated as part of its assessment.

The number of money laundering convictions over the last five years has been impacted by a series of constitutional challenges and by the saturation of the court system, the global watchdog said in its report on India, released on Thursday. India’s courts have huge backlogs of cases, with many left pending for years.

The Enforcement Directorate, India’s anti-money laundering agency, has seized assets of suspected financial criminals amounting to 9.3 billion euros ($10.4 billion) over the last five years but confiscation based on convictions amounted to less than $5 million, the report said.

“It is critical India addresses these issues in view of accused persons waiting for cases to be tried and prosecutions to be concluded,” it said.

The three areas in which there is partial compliance include bank scrutiny of political figures’ source of wealth and oversight of the finances of non-profit organisations and non-financial businesses and professionals.

The watchdog also noted that India faced financing threats from groups active in the Indian Illegally Occupied Jammu and Kashmir (IIOJK) region and money laundering from illegal activities related to corruption, drug trafficking and cyber crime.

The statement added that India needs to focus on concluding the prosecutions and properly sanction such financiers.  

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Pakistan, Russia plan free Trade Agreement with Eurasian Economic Union – Pakistan Observer

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ISLAMABAD – Pakistan and Russia mulled stern measures to boost economic ties with new trade and energy initiatives, as the Russian Deputy Prime Minister arrived in Islamabad to discuss several key areas of collaboration.

In a press conference with Pakistan’s Deputy PM Dar Ishaq Dar, both sides decide to explore bilateral trade between two countries reached $1 billion last year and highlighted the need to address logistical and other challenges to further enhance trade relations.

Dar stressed that energy cooperation with Russia holds significant promise and expressed Islamabad’s interest to explore more avenues. He underscored importance of developing connectivity projects, including rail and road networks, to strengthen economic ties not just between Pakistan and Russia but extending to other regions as well.

Deputy PM emphasized Pakistan’s view of Russia as a crucial player in West, South, and Central Asia, and reaffirmed that strengthening ties with Russia remains a top priority in Pakistan’s foreign policy. He reiterated Pakistan’s commitment to working with Russia to promote peace and stability in Afghanistan.

In his remarks, he revealed discussions about potential collaboration between Pakistan and the Eurasian Economic Union, which includes Armenia, Belarus, Kazakhstan, Caucasia, and Russia. The two sides explored the possibilities for implementing a free trade agreement involving these five countries and plan to continue discussions to finalize the agreement.

Russian Minister also pointed out that the upcoming inter-governmental commission meeting in Russia will serve as a platform to further enhance trade and economic relations. He further highlighted that both nations share aligned goals within the Shanghai Cooperation Organization (SCO), including in areas such as connectivity, climate action, food security, and energy transition.

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Easypaisa introduces Rs99 fee for Biometric, and account upgradation? – Pakistan Observer

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EasyPaisa, mobile wallet used by over 9.5 million Pakistanis, lately added Rs99 charges for failed biometric verification with NADRA and account upgradation a fee that lacks clear regulatory justification. Users reported multiple deductions from their accounts after unsuccessful attempts to match their fingerprints.

A recent notification received by Easypaisa users said “Your fingerprints could not be matched with your ID Card from NADRA records”, asking the person to scan fingerprints.

It mentioned you can get your account biometrically verified at your nearest retailer, and that a fee of Rs. 99 will be charges from your account for biometric verfication.

Easypaisa Introduces Rs99 Fee For Biometric And Account Upgradation

The recent move raised question and Easypaisa is yet to share an official statement on the mettter of introducing new charges.

In 2023, the mobile wallet company imposed a monthly SMS alert fee of Rs15, which raised concerns among its vast users. for the unversed, Pakistan’s central bank directed all banks and microbanks to share free SMS and email alerts.

JazzCash new charges on cash deposits

 

 

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