KARACHI: Pakistan’s new government is expected to approach the International Monetary Fund (IMF) in the last week of August or early September for financial assistance. The country desperately needs to stabilize the economy, say officials.
The caretaker officials have already started work on the program agenda to be presented to the fund, Dr. Shamshad Akhtar, Pakistan’s caretaker finance minister recently confirmed, saying that they are “working on the agenda just to save the time of the ncoming government.”
The Pakistan Tehreek-e-Insaf (PTI), led by Imran Khan, gained a majority of votes in the election on July 25.
Khan is working on the formation of a new government and is expected to take the oath of office of prime minister on Aug. 11, before the country’s independence day which falls on Aug. 14.
“The final decision to approach IMF, including the required amount, will be taken soon after the formation of a new government,” Senator Mohsin Aziz, member of the Senate’s committee on finance, revenue and economic affairs, told Arab News.”Currently the party is contemplating other options as well to avoid the IMF program, including financial assistance from China and import of oil on credit or deferred payment from Saudi Arabia, but the situation is worst,” said Senator Aziz, who belongs to the PTI.
The country is expected to seek between $6 and $12 billion financial assistance from the IMF.
“The actual need of the country is $28 billion. However, from the IMF the country can avail up to $6 billion out of its $12 billion Special Drawing Rights (SDR) quota as the country has already consumed half of the quota by availing the program in 2013,” Dr. Hafeez Pasha, former finance minister and economist, told Arab News.
Pasha, however, said it would be difficult to get loan of up to $12 billion from the IMF.
“It may only be possible if the friendly countries, especially Washington, support Pakistan in this case. If Pakistan manages to get an IMF loan, other lenders such as the Asian Development Bank and the World Bank can also step forward to help as they need a letter of comfort from the IMF,” Pasha noted.
Pakistan is suffering from historical external account imbalances as its current account deficit swelled to $18 billion by the end of the fiscal year 2018.
The country’s dollar reserves have declined to $9 billion which is not even enough to cover its two months’ import requirements.
The country’s national currency, the Pak rupee, has been constantly under pressure due to the demand-supply gap.
However, after the election the sentiments have changed in favor of the PTI, which resulted in appreciation of the Pak rupee.
On Monday the Pak rupee in the interbank market traded at 124/126, which is an appreciation of 3 percent over Friday’s close of 127.90.
This follows gains witnessed in open market over the weekend where the dollar was quoted at 121/122 compared with the pre-election level of 131.80, an appreciation of 4 to 5 percent.
“The sentiments after election have changed the trends in the open market where we have abundant stocks of currency but no buyers,” Zafar Paracha, general secretary of Exchange Companies Association of Pakistan, told Arab News.
Paracha attributes currency appreciation to three factors: suspension of currency smuggling from Afghanistan and Iran due to the border closure, steps taken by State Bank of Pakistan against unregistered exchange companies, and the sentiment that arose after the election victory of PTI.
Pakistan’s stock market also reacted positively after the election, gaining 2,218 points as investors expressed satisfaction over political clarity.
“Recent news flow regarding a loan from China of $2 billion and possible assistance from Saudi Arabia is helping foreign exchange market sentiments,” said Muhammad Sohail, CEO of Topline Securities.
Senator Aziz said: “Positive sentiments prevail in the currency and stock market of the country but these are not going to stay for long as the country’s actual situation is worse.”
The country will have to seek financial assistance from the IMF, he added.
Pakistan to approach IMF soon after formation of new government, say officials
Pakistan to approach IMF soon after formation of new government, say officials
- Oil import on credit from Saudi Arabia, loan from China may ease external pressure, PTI senator Mohsin Aziz says
- Pakistan needs $28 billion, seeks up to $12 billion IMF bailout package, economist says
Pakistani firms bank on clinching ‘significant deals’ after debuting at Gulfood Manufacturing 2024
- Around 29 Pakistani firms participated in Gulfood Exhibition 2024 from Nov. 5-7 in Dubai
- Pakistani exhibitors say visitors from Middle East showed keen interest in their products
ISLAMABAD: After participating for the first time at the renowned Gulfood Manufacturing 2024 event in Dubai this week, Pakistani exhibitors on Thursday hoped the experience would help them clinch “significant deals” to penetrate markets in the Middle East.
Since 2014, Gulfood Manufacturing has been advancing the global food processing sector through innovation. This year, more than 1,200 suppliers from over 60 countries participated in the event held in Dubai from Nov. 5-7.
In a first, 21 Pakistani exhibitors took part in the tenth edition of the food and beverages trade fair under the Trade Development Authority of Pakistan’s (TDAP) umbrella.
Eight other Pakistani companies participated independently to showcase food ingredients, processing, packaging, printing, labeling, and supply chain solutions for the food and beverage industry.
Abdul Wahab, director of the Faisalabad-based food packaging machine manufacturer Nadeem Engineering Company, said businesses from across the Middle East showed keen interest in his organization’s machinery and other products.
“Our competitive prices and high quality helped initiate many business deals, which we hope to finalize in the coming weeks,” Wahab told Arab News.
Wahab thanked the Pakistani mission in the UAE and TDAP for their support, saying it enabled them to create more business opportunities.
“We are optimistic about securing a few significant deals that will help us enter the vast Gulf market,” he added.
A dedicated Pakistan Pavilion at the trade fair helped Pakistani firms showcase their products to visitors from across the globe.
Sheikh Abdul Qayyum, the chief executive officer of the Karachi-based company Lunwa Biz Packaging, praised the Pakistan Pavilion Initiative by saying that it helped generate a “good response” from visitors.
“Some good deals and memorandums of understanding have been signed, and we are working to bring them to final maturity,” Qayyum told Arab News. He said his company hoped to achieve positive results and generate substantial revenue from these agreements.
“We received support from the TDAP, which made the booth valued at Rs2.5 million available to us for Rs0.7 million, allowing us to make efforts to utilize this opportunity,” Qayyum said.
Faraz Tayyab, the project manager of Dubai-based company Menras who designed and managed the Pakistan Pavilion, said over 100,000 people visited Pakistani stalls while exhibitors reported an excellent response for their products.
“One machine manufacturer even sold his display unit and signed a deal to send additional machines to the Dubai-based buyer from Pakistan,” Tayyab told Arab News.
Although it was their first time participating, Tayyab said Pakistani companies have made an impressive impact and will benefit greatly from this experience.
“It has opened the gateway for a bigger participation next year,” he said.
Four soldiers, five militants killed in northwest Pakistan operation — military
- Security forces, militants traded fire in Karama area in South Waziristan, says military’s media wing
- Pakistani has suffered surge in militant attacks since November 2022 in areas bordering Afghanistan
ISLAMABAD: Four Pakistani soldiers and five militants were killed during a gunbattle in the country’s restive northwestern Khyber Pakhtunkhwa (KP) province, the army’s media wing said on Thursday, as Islamabad grapples with surging militancy.
The exchange of fire between security forces and militants took place in South Waziristan’s Karama area on Wednesday, the Inter-Services Public Relations, the army’s media wing, said in a statement.
The army said four Pakistani soldiers were killed during the exchange of fire. These included Naib Subedar Taib Shah, 38, Lance Naik Gulab Zaman, 30, Lance Naik Muzammil Mehmood, 30 and Lance Naik Habibullah, 28.
“Resultantly, five Khwarij were sent to hell due to effective engagement by own troops,” the ISPR said, referring to the term the military uses for the Pakistani Taliban militants.
The army said it was conducting a sanitization operation in the area to eliminate any other militants.
“Security Forces of Pakistan are determined to wipe out the menace of terrorism and such sacrifices of our brave soldiers further strengthen our resolve,” it concluded.
Pakistan has been witnessing a spike in militant violence in its northwestern and southwestern regions that border Afghanistan, particularly after the Pakistan Taliban or the Tehreek-e-Taliban Pakistan (TTP) called off its fragile truce with the government in Islamabad in November 2022.
The militant group, which is said to have sanctuaries in neighboring Afghanistan, is separate from but a close ally of the Afghan Taliban.
Ties between Islamabad and Kabul have been strained as the former accuses the latter of sheltering TTP militants. Afghanistan denies the allegations and has urged Pakistan to resolve its security challenges internally.
Pakistan says Trump election as US president won’t affect China ties
- FO spokesperson says Pakistan wants to strengthen and broaden relationship with US
- Says Pakistan and US maintain ties via mutual respect, confidence and non-interference
ISLAMABAD: Pakistan said on Thursday its relations with key longtime ally China would remain “unaffected” by Donald Trump winning the US presidential election, as Islamabad walks a diplomatic tightrope between the two global powers.
Pakistan maintains a delicate balance in its relations with China and the US. While aligned with the US for military cooperation and counter-terrorism efforts, Pakistan has strengthened economic ties with Washington’s rival China through initiatives like the China-Pakistan Economic Corridor (CPEC).
Washington and Beijing’s ties remain strained as they compete for global influence, with the US seeking to maintain its dominance and China aiming to expand its reach. The two countries are often embroiled in disagreements over trade, Taiwan, the South China Sea and China’s Belt and Road Initiative.
This complex rivalry impacts Pakistan as it navigates its strategic partnerships with both world powers while grappling with a prolonged economic crisis.
“Pakistan’s relations with China are all-weather,” Foreign Office Spokesperson Mumtaz Zahra Baloch said during a weekly press briefing when asked if Trump’s victory will affect the country’s China policy.
“They are strategic and a source of stability in our foreign policy.”
Baloch said Islamabad does not even need to consider the possibility that its relationship with China will be affected by any domestic development in another country.
She stressed that Pakistan’s relations with China have grown and expanded over the last several decades, emphasizing that the relationship remained immune to developments around the world.
Baloch dismissed claims that President-elect Trump could influence Pakistan’s politics as speculative, emphasizing that Pakistan and the US were “old friends” maintaining relations based on mutual respect, confidence, and non-interference.
In response to another question, the spokesperson said President Asif Ali Zardari and Prime Minister Shehbaz Sharif had already congratulated President-elect Trump on his presidential election win.
“Our relations with the United States are decades old, and we look forward to further strengthen and broaden Pakistan-US relationship in all fields,” she added. “As the Deputy Prime Minister said in a tweet yesterday, we look forward to fruitful and mutually beneficial cooperation between Pakistan and the United States.”
Pakistan and the US cultivated strong defense ties during the Cold War days yet their relationship was also tested by divergent priorities on various issues.
However, tensions between the two countries escalated, particularly after 9/11, when US officials criticized Pakistan for not sufficiently supporting the American military efforts against the Taliban in Afghanistan.
Washington and Islamabad’s ties were further strained as the former suspected the latter of supporting the Taliban in its 2021 takeover of Kabul, allegations which Islamabad rejected. Tensions rose further in 2022 when former PM Imran Khan accused the Biden administration of orchestrating his ouster via a parliamentary vote, a charge the US denied.
Pakistan, under Shehbaz Sharif’s two separate stints as prime minister in 2022 and 2024, has made attempts to improve its ties with the US.
Pakistan rejects reports of joint military operation with Iran against Baloch militant group
- Militant outfit Jaish Al-Adl claimed Pakistani, Iranian forces killed 12 of its members in joint operation in Saravan on Tuesday
- Pakistani security forces conducted operation alone within its territory this week against smugglers, says FO spokesperson
QUETTA: Pakistan’s foreign office spokesperson on Thursday rejected reports that Islamabad and Tehran launched a joint military operation in the country’s southwestern border area this week to kill 12 militants, describing it as “fake news” despite a banned militant group claiming the action took place.
The spokesperson’s remarks followed militant outfit Jaish Al-Adl’s statement this week in which it claimed Pakistan and Iran’s forces on Tuesday carried out airstrikes against its fighters in the Iranian border city of Saravan, near Pakistan’s Panjgur district in Balochistan. It said the strikes killed 12 of its members and injured four others.
Iranian rights organization Halvash had also confirmed the development on social media platform X.
“First, I would like to state that this information is not correct. This is fake news,” Mumtaz Zahra Baloch, Pakistan’s foreign office spokesperson, said during her weekly press briefing.
“Statement by terror groups should not be taken seriously.”
Baloch, however, confirmed Pakistani security forces had conducted an operation west of Panjgur to root out smugglers in southwestern Balochistan province.
“The operation took place 30 kilometers within our territory against smugglers, and this was undertaken by Pakistani security forces alone,” she disclosed.
Balochistan Levies, a paramilitary force responsible for law and order in the restive province, confirmed they received reports of an attack in Koh e Sabz area located 70 kilometers from Panjgur city on Tuesday.
“Three people were injured in the attack but we don’t know who carried out the attack in the remotest bordering area,” Shakeel Ahmed, a Levies soldier in Panjgur, told Arab News.
Ahmed said the paramilitary force did not know how many people were killed in the attack since Levies did not receive any bodies in Panjgur.
A local journalist in Panjgur said three persons injured in the alleged attack on Tuesday belonged to Peshawar, Karachi and Washuk cities of Pakistan. He said they were brought to Panjgur for medical treatment.
“The government officials in the district did not confirm the attack yet,” he told Arab News, speaking on condition of anonymity.
HISTORY OF ROCKY RELATIONS
Pakistan and Iran have had a history of rocky relations despite a number of commercial pacts between the two countries, with Islamabad being historically closer to Washington.
One of Iran’s poorest regions, Sistan-Baluchestan on the border with Pakistan has long been plagued by unrest involving drug-smuggling gangs, rebels from the Baloch minority and religiously motivated militants.
Jaish Al-Adl or “Army of Justice” has claimed responsibility for several attacks on Iranian forces in Sistan and Baluchestan over the years, straining ties between the two Muslim-majority countries.
Pakistan and Iran came to the brink of war in January this year after both countries launched cross-border strikes against armed groups and their hideouts operating in border villages.
Regarding this week’s visit by Iran’s foreign minister to Islamabad, Baloch said both sides had agreed to strengthen coordination on border areas.
“Both sides agreed that we will cooperate to ensure that the border between Pakistan and Iran will be a border of peace and amity, and we will strengthen coordination on all aspects of border security,” she said.
Pakistan stock market closes above 92,000 points thrice in a row after policy rate cut
- KSE-100 index climbs 499 points or 0.54 percent to close at 92,520.48 points on Thursday
- Analysts say market responding to reduced interest rates, move to restart privatizations
ISLAMABAD: The Pakistan Stock Exchange (PSX) closed above 92,000 points for the third time in a row on Thursday, with analysts attributing the bullish trend to market volatility triggered by reduced interest rates and investors selling their stocks for profit.
Pakistan’s benchmark index settled at 92,304.32 points on Tuesday and 92,021.44 points on Wednesday. As per the stock market’s official website, the benchmark KSE-100 index increased by 499 points or 0.54 percent on Thursday to close at 92,520.48 points.
The bullish trend has been observed in the market since Monday when Pakistan’s central bank cut its key policy rate by 250 basis points to 15 percent. This was the fourth straight reduction since June, as the country keeps up efforts to revive a sluggish economy with inflation easing.
“The market is responding to reducing interest rates and, importantly, is also picking up on the government’s razor-sharp focus on the economy evidenced by the push to increase tax-to-GDP, attract FDI, and restart privatizations,” Raza Jafri, chief executive officer of leading financial services corporation EFG Hermes Pakistan, told Arab News.
He highlighted how lower interest rates were helping in creating valuation multiples at the KSE-100 but their “positive impact on the real economy will come with a lag.”
Jafri said the rally this year was led by banks, fertilizers and pharmaceuticals, adding that a rotation toward the construction, auto and oil marketing sectors more aligned with economic recovery was witnessed.
“An analyst at Topline Securities said the market showed notable volatility, with the index reaching a peak of 92,967 and dipping to a low of 91,891 as investors capitalized on profit-taking in large-cap stocks,” Topline Securities said in a social media post.
The development comes as the South Asian nation’s economic indicators continue to improve after it secured a $7 billion, 37-month bailout package from the International Monetary Fund (IMF) in September.
Last year, Pakistan narrowly avoided a sovereign default when it clinched a last-gasp $3 billion IMF bailout program. The country has suffered a prolonged economic crisis that drained its foreign exchange reserves and saw its currency weaken amid double-digit inflation.
