Day: November 29, 2021

The Pakistani Rupee (PKR) slid to a new record low against the US Dollar (USD) and depreciated by 74 paisas against the greenback in the inter-bank market today. It hit an intra-day low of Rs. 176.3 against the Dollar during today’s open market session.

The local currency depreciated by 0.42 percent against the USD and closed at Rs. 176.20 today after it posted losses of 48 paisas and closed at Rs. 175.46 in the inter-bank market on Friday, 26 November.

The local currency hit its last record low against the USD on 12 November when it closed at Rs. 175.73.

The former Secretary-General of the Exchange Companies Association of Pakistan, Zafar Paracha, told a financial daily that the downward slide of the PKR is remarkable, given the strong performance of all major economic indices, the significant decline in international commodity prices, and the recent favorable comment by Finance Adviser Shaukat Tarin.

He remarked that the current Rupee depreciation could be a result of conditions set out by the International Monetary Fund (IMF).

Moreover, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted about today’s inter-bank performance prior to the Rupee’s historic low at the market close. He said, “While Pakistan celebrated Blessed Friday & US was enjoying [a] long weekend, OIL PRICES plunged. The spread of VARIANT outbreak news helped. In thin market condition, BACKWARDATION position got corrected”.

He added that softer oil prices will ease the pressure on the PKR to an extent.

Although global oil prices recently plunged by over 10 percent in what was, perhaps, the biggest drop since April 2020 after fears of the new COVID-19 variant, Omicron, made waves in the market, the Pakistani Rupee managed to report record drops of its own as November draws to a close.

The ‘most worrying’ new South African variant caused the price of Brent crude to tumble by $8.77 (10.7 percent) to $73.45 a barrel on Friday last week after several European and Asian countries enacted immediate travel restrictions to curb its transmission.

Regardless, the local unit took a hit and damaged the reputation of an already shaky exchange ledger as oil prices jumped over five percent on Monday, recovering from Friday’s slump that saw the biggest one-day fall since early 2020.

The PKR continued its disappointing performance against the other major currencies as well, and posted losses in the inter-bank currency market today.

It lost 73 paisas against the Canadian Dollar (CAD), 69 paisas against the Australian Dollar (AUD), a huge Rs. 1.35 against the Pound Sterling (GBP), and 19 paisas against the Malaysian Ringgit (MYR).

The Rupee continued its harrowing display against the pervasive Euro (EUR) after it posted losses of 70 paisas against the eurozone currency. It also posted losses of 16 paisas against the Chinese Yuan (CNY).

Moreover, it posted losses of 20 paisas against the UAE Dirham (AED) and 19 paisas against the Saudi Riyal (SAR) in the interbank currency market today.

Source: Pro Pakistani

Federal Tax Ombudsman (FTO) Dr. Asif Mahmood Jah has stated that unnecessary checking of duty paid goods at the Customs checkpoints not only delays the flow of items but is also against the government policy of creating ease in doing business.

Addressing a public awareness session during his visit to Rawalpindi Chamber of Commerce and Industry (RCCI) on Monday, the FTO said he had directed the Federal Board of Revenue (FBR) to rectify the maladministration being witnessed at the Customs check posts. He said a number of complaints were filed regarding harassment leading to corruption at various Customs check posts countrywide. He said that a mobile App, as per directions of the Prime Minister, would soon be launched to address the complaints at a faster pace along with better documentation processes.

Dr. Jah announced to establish an FTO desk at Chamber House in addition to giving representation to RCCI in the FTO advisory board through inclusion to two RCCI members.

Earlier, President RCCI Nadeem A. Rauf said the visit of FTO to the Chamber along with the FBR and Customs team would help resolve the problems of the business community. “This is a reflection of the strong partnership between the business community and FBR,” he asserted. He lauded the FTO announcement of setting up an FTO Desk at the Chamber.

Chief Commissioner Inland Revenue Dr. Khalid Mahmood Lodhi, Chief Collector Ahmad Raza also spoke on the occasion and noted down the complaints and passed the direction on spot.

Collector Customs Junaid Jalil Khan, Advisor Customs Dr. Arsalan Sabktagin, Advisor IT Mehbooba Razzaq, Commissioner Withholding Zone Nazia Zeb Ali, Commissioner City Zone Farhat Qayyum, and Commissioner Cantt Zone Abbas Ahmed Mir along with Senior Vice President RCCI Asim Malik, Vice President Talat Awan, former President Raja Amer Iqbal, and executive members and representatives of Anjuman-e-Tajiran were present on the occasion.

Source: Pro Pakistani

The State Bank of Pakistan (SBP) has released a statement clarifying concerns from the past few weeks, where certain sections of the media, including op-eds, expressed concerns over its actions, particularly concerning monetary policy decisions and the role of the COVID-related monetary accommodation in fueling the currently elevated inflation outturns.

The Bank explained that certain op-eds referenced the monetary policy decisions in the earlier half of 2021 and implied that the Central Bank had absolved itself of its responsibility to combat inflation when it was rising. “Such points are all easier made in hindsight but let us remind ourselves what the situation was actually like back in May and July 2021.”

SBP explained how demand-side pressures appeared contained in the economy and price pressures were concentrated in a few items, wage growth was subdued, and inflation expectations were reasonably anchored. At that time, Pakistan was going through the 3rd and subsequently the more virulent and uncertain 4th Delta-variant wave of COVID-19. There were a few occasions when micro lockdowns were imposed while the vaccine rollout was not as extensive as it is currently.

In lieu of the pandemic situation during that time, the Monetary Policy Committee adopted a prudent policy stance by keeping interest rates unchanged, so as to not preemptively disrupt economic activity. It is quite easy, in hindsight, to criticize this decision even though no tangible alternatives were proposed in the op-eds or elsewhere at the time.

The Bank explained that in the midst of a once-in-a-century pandemic, it would be imprudent to solely superimpose classical economic theories onto data outturns. Policymakers, economists, and businesses around the world did not know how the global or domestic economy would evolve in response to mobility restrictions of varying stringencies in different locations. Similarly, there was, and in fact, continues to be, heightened uncertainty regarding price-setting behavior.

For instance, there is an ongoing debate in global policy circles and financial markets over whether the ongoing bout of inflation is transitory in nature or not. In the face of an unprecedented shock-like Covid, invoking supposed historical, textbook patterns of overheating, as in the op-ed, is facile. Under such circumstances, as policymakers around the world acknowledged, the costs of normalizing policies too soon outweigh those of waiting for more clarity on the path of inflation and output. As that uncertainty has recently waned in Pakistan, monetary policy is being appropriately normalized.

Moreover, the Central Bank remarked that during the pandemic, it would be imprudent to solely super-impose classical economic theories onto data outturns. There was, and in fact, continues to be, heightened uncertainty regarding price-setting behavior. Under such circumstances, as policymakers around the world acknowledged, the costs of normalizing policies too soon outweigh those of waiting for more clarity on the path of inflation and output. As that uncertainty has recently waned in Pakistan, monetary policy is being appropriately normalized.

The State Bank of Pakistan reiterated that its policy stance is geared towards price stability while playing its due role in contributing to economic growth and development. Getting this balance right through the various stages following COVID-19 has been the key goal of monetary policy and helps explain the path of policy actions.

Source: Pro Pakistani

Minister for Industries and Production Makhdum Khusro Bakhtyar on Monday asked the Sindh government to take measures against fetilizer hoarders in the province.

In a statement, the minister said that Sindh-based fertilizer dealers had purchased an extra 1,25,000 tons of urea as compared to last year. Similarly, dealers from peripheral areas of Punjab (adjacent to Sindh) bought 50,000 tons more urea as compared to last year for hoarding.

The minister lamented that due to the negligence of the Sindh government, these stocks couldn’t be moved to food-bowl areas of Punjab threatening the Rabi farming.

Calling it a matter of national food security he asked Sindh to take measures on basis of data of suspected hoarders in Sindh shared by the federal government.

The minister also announced that a new enactment to reward whistle-blowers was being promulgated to check hoarding and profiteering, by which, a maximum of Rs. 5 million will be awarded to those who will provide credible and actionable information about the hoarding of fertilizers to the government.

Moreover, the Minister said that there is an ample amount of urea is available for Rabi season as the government has arranged additional production of 2,25,000 tons compared to last year by extending the operations of northern plants and Fauji Fertilizer Bin Qasim Limited (FFBL) till February. In addition to these measures, the government is finalizing the import of urea which will reach Karachi by mid-December for maintaining buffer stocks of urea.

Earlier, while chairing a meeting on fertilizer supply position, Prime Minister Imran Khan lauded the efforts of the Ministry of Industries and Production, Punjab government and cooperation from fertilizer companies for making collective efforts to reduce prices of urea by Rs. 400 in one week.

Source: Pro Pakistani

Advisor to the Prime Minister on Finance and Revenue Shaukat Tarin has directed the Federal Board of Revenue (FBR) to launch the taxpayer outreach initiative at the earliest to expand the existing tax base and improve the revenue collection.

Shaukat Tarin was chairing a meeting on broadening of the tax base at Finance Division on Monday. The meeting was attended, among others, by Chairman FBR Dr. Muhammad Ashfaq Ahmad, senior FBR officers, and officials from the Finance Division.

The Chairman FBR and his team gave a detailed presentation on the progress on readiness for potential taxpayer outreach initiatives to boost revenue growth and resource mobilization.

Dr. Ahmad said pragmatic steps had been initiated for the compilation of data with the support of National Database and Registration Authority (NADRA). He added that the data would be available to potential and current taxpayers in a presentable and comprehensible manner through a web portal.

Expressing confidence in FRB, the Advisor lauded its steps and stressed that efficient and robust communication with the taxpayers should be carried out to harness public support for FBR efforts to broaden the tax base and promote a tax compliant culture in the country.

Key challenges facing FBR in reaching out to potential and current taxpayers, creating public awareness, and taking confidence-building measures were also discussed in the meeting.

Source: Pro Pakistani

Advisor to the Prime Minister on Finance and Revenue Shaukat Tarin, held a follow-up meeting with a delegation of the Pakistan Sugar Mills Association at the Finance Division today.

Advisor to the Prime Minister on Commerce & Investment, Mr. Abdul Razak Dawood, Secretary NFS&R, Secretary Industries & Production, Chairperson CCP, Chief Secretaries of Punjab and Sindh, and senior officers attended the meeting.

Chairman PSMA thanked the Advisor to the Prime Minister on Finance and Revenue for addressing their genuine issues. The delegation appreciated the efforts of the Advisor in this regard. PSMA delegation further apprised the meeting of some issues the sugar industry is facing.

The Adviser assured the delegation that the sugar industry’s problems will be resolved at a top priority as the government appreciated the critical role of the sugar industry in the economic progress of the country. He listened to all delegation members keenly and issued orders for resolution of their problems indicated by the members of PSMA.

At the end, the Advisor reiterated the government’s commitment to address genuine concerns of the sugar industry.

Source: Pro Pakistani