Pakistani rupee hits historic low as outcome of IMF talks remains uncertain

A Pakistani man counts Pakistan's rupees at his shop in Karachi on May 16, 2019. (AFP/ FILE)
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Updated 22 October 2021
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Pakistani rupee hits historic low as outcome of IMF talks remains uncertain

  • Pakistan’s national currency has lost its value by Rs22 against the greenback since May 2021 due to a high import bill and Afghanistan’s situation
  • The IMF country head says the fund remains engaged with Pakistan for the completion of the sixth review of a $6 billion bailout package

KARACHI: Pakistan’s national currency on Friday closed the weekend trading session in the interbank market at Rs174, making experts attribute its continuous slide against the US dollar to the uncertain outcome of the country’s ongoing talks with the International Monetary Fund.

The Pakistani rupee has shed its value against the greenback by 14.4 percent since May 2021 when the currency was trading at about Rs152 per dollar.

While analysts previously attributed the currency depreciation to weak economic fundaments, they believe the Pakistani rupee is now losing its value further due to the continuing IMF negotiations for the completion of the sixth review of a $6 billion loan.

“Earlier, the rupee was under pressure due to the high import bill but its most recent spike is caused by the uncertainty related to the outcome of the IMF talks,” Tahir Abbas, research head at Arif Habib Limited, said. “If we cannot successfully conclude talks with the IMF, it will have an impact on our inflows. A positive outcome, however, will ease off some of the pressure that has recently built on the rupee.”

A top IMF official told Arab News on Friday her organization's negotiations with Pakistan were continuing on how to move forward the bilateral agenda.

“The IMF team remains engaged with our Pakistani counterparts on moving forward our work agenda,” Teresa Dabán Sanchez, the fund’s country head, said. “We are looking forward to our continued discussions with the Pakistani authorities on the set of policies and reforms that could form the basis for the completion of the 6th review under the EFF [Extended Fund Facility].”

The Pakistani currency has also been under pressure for the last several months due to a sharp increase in imports on the back of the country’s economic recovery amid the coronavirus pandemic.

More recently, Pakistan witnessed a significant outflow of US dollars to Afghanistan as well, after the withdrawal of the international forces from the neighboring country in August which further exerted pressure on the Pakistani rupee.

The country’s central bank governor Dr. Reza Baqir tried to highlight the positive dimension of the currency depreciation during his London visit on Monday, saying it benefited the families of overseas Pakistanis since “the volume of their hard-earned remittances are now increasing because of the exchange rate.”

His comment met with strong criticism at home from all segments of the society.

Meanwhile, currency traders said the quantum of trade in the open market had substantially declined due to the condition of biometric verification imposed by the central bank.

“The daily trade volume has declined from $2-3 million to less than half a million dollars due to the condition of biometric verification,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan, told Arab News.

Bostan said many exchange companies were not facilitated by the authorities with biometric equipment which was slowing the open market trade.

“Authorities have assured that the system will be placed by Monday or Tuesday which will enable them to monitor the trade that exceeded more than $500,” he continued.

He said the pressure on the Pakistani rupee due to the surge in demand in Afghanistan had eased off.

“The pressure arising from Afghanistan has subsided, though the import pressure on Pak rupee has continued to increase,” Bostan added.

The country’s stock market also posted losses on Friday and closed 243 points lower at 45578.36 due to the recent decision of the Financial Action Task Force to keep Pakistan under increased monitoring along with the economic uncertainty caused by the IMF negotiations.

“The stocks closed lower due to delay in the conclusion of the Pak-IMF talks and the FATF decision over status quo and retention of the country on the grey list,” Ahsan Mehanti, senior stock analyst and chief executive of Arif Habib Corporation, told Arab News. “Economic uncertainty, surging trade deficit and weakening rupee played a catalyst role in the bearish close.”


Pakistan’s army, foreign office reject Indian army chief’s ‘epicenter of terrorism’ allegations

Updated 8 sec ago
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Pakistan’s army, foreign office reject Indian army chief’s ‘epicenter of terrorism’ allegations

  • India’s army chief this week accused Pakistan of being involved in infiltration attempts by “terrorists” in India
  • Pakistan’s army says statement “contrary to facts,” attempt to divert attention from “brutality” in Indian-held Kashmir

ISLAMABAD: Pakistan’s army and foreign office on Wednesday rejected Indian Army Chief General Upendra Dwivedi’s recent statement in which he referred to Pakistan as the “epicenter of terrorism,” dismissing his remarks as an attempt to deflect the world’s attention from alleged brutalities in disputed Kashmir by New Delhi. 
In a statement on India’s Army Day on Monday, Gen. Dwivedi accused Pakistan of “orchestrating” infiltration attempts in India, describing Pakistan as the “epicenter of terrorism.” He said 60 percent of the “terrorists” India eliminated last year were of Pakistan origin. 
Nuclear-armed neighbors India and Pakistan have fought two out of three wars over the disputed Himalayan Kashmir valley. Both claim the territory in full but administer only parts of it. India accuses Pakistan of arming militants in the Kashmir territory under its control, allegations that Islamabad has denied. Pakistan, on the other hand, accuses India of repressing the rights of Kashmiris in India and denying them the right of self-determination. 
“Insinuating Pakistan as the epicenter of terrorism by the Indian Army Chief, is not only contrary to facts, but also an exercise in futility to beat the dead horse of India’s default position — blaming Pakistan for indigenous reaction to state-sponsored brutality,” a statement from the army’s media wing said.
The Inter-Services Public Relations, the army’s media wing, said Dwivedi’s remarks were a case of “extreme duplicity” aimed to diverting the world’s attention from India’s “brutality” in the region of Kashmir under its control. 
The army said that such repression has only strengthened the resolve of Kashmiris for their right of self-determination, which is enshrined in the UN Security Council Resolutions.
“Instead of trying to conjure up a non-existent terror infrastructure in Pakistan, it would be wise not to indulge in self-delusion, and appreciate the ground reality,” the army said. “Pakistan takes strong exception to such baseless and unfounded statements.”
In a separate statement earlier on Wednesday, the foreign office rejected Gen. Dwivedi’s “baseless accusations and unfounded assertions.”
“Pakistan also underscores that provocative statements of this nature are counterproductive to regional peace and stability,” the foreign office said. 
Political tensions between the two countries have remained high since 2019 when Indian Prime Minister Narendra Modi withdrew Jammu and Kashmir’s special autonomy in 2019 and split the former state into two federal territories. 
Pakistan described the move as unilateral and illegal, saying it was aimed at tightening India’s grip on the Muslim-majority region. Islamabad suspended trade with New Delhi and downgraded diplomatic ties with its neighbor following the decision.


Saudi aid agency KSrelief distributes over 2,000 food parcels in Pakistan

Updated 15 January 2025
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Saudi aid agency KSrelief distributes over 2,000 food parcels in Pakistan

  • Food parcels in flood-affected Sindh and Khyber Pakhtunkhwa regions, benefiting 13,159 people
  • Latest initiative forms part of this year’s Food Security Support Project in Pakistan by KSrelief 

RIYADH: The Kingdom’s aid agency KSrelief has distributed 2,028 food parcels in Pakistan’s flood-affected Sindh and Khyber Pakhtunkhwa regions, benefiting 13,159 people, the Saudi Press Agency reported recently.

Sunday’s initiative forms part of this year’s Food Security Support Project in Pakistan.

The aid reflects the Kingdom’s ongoing humanitarian efforts through KSrelief to assist needy individuals in Pakistan.


Pakistan to cut tariff for electric vehicle charging stations by 45%

Updated 15 January 2025
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Pakistan to cut tariff for electric vehicle charging stations by 45%

  • The government aims for 30% of vehicles to run on electricity by 2030
  • It has announced a 15-day registration process for charging stations

KARACHI: Prime Minister Shehbaz Sharif has decided a 45 percent reduction in electricity tariffs for electric vehicle (EV) charging stations, cutting rates from Rs71.10 per unit to Rs39.70 per unit, said Pakistan’s Energy Minister Awais Ahmad Khan Leghari on Wednesday.
Pakistan has actively promoted EV adoption to combat environmental challenges, reduce reliance on imported fossil fuels and improve urban air quality. Under its Electric Vehicle Policy 2019-2024, the government aims for 30 percent of vehicles to run on electricity by 2030.
However, inadequate charging infrastructure, frequent power outages and the high cost of EVs have hindered progress.
“Today, the prime minister has decided that including taxes, we were charging a tariff of Rs71.10 [$0.26] to these charging stations,” Leghari told reporters in Islamabad. “What the distribution companies used to charge them, we are reducing it approximately by 45 percent and announcing a tariff of Rs39.70 [$0.18] today.”
Leghari said that there were no charging stations for motorbikes, three-wheelers and rickshaws in Pakistani neighborhood.
“And the reason for that absence is the high cost of electricity,” he added. “And the absence of laws and regulations on the basis of which this business can start.”
A statement issued by the power division said the country’s first-ever regulations for establishing EV charging stations and battery swapping points was being implemented under the National Energy Conservation Authority, with an official gazette notification issued.
It highlighted the economic benefits of these measures, saying that switching motorcycles to electric technology at an average cost of Rs50,000 could save $6 billion annually on fuel.
Similarly, electrifying three-wheeled rickshaws could significantly reduce urban travel costs and help combat air pollution.
The reduced EV charging costs are also expected to lower transportation expenses, positively impacting goods delivery and essential commodity prices.
The government has decided to support these initiatives through a one-window registration process for setting up charging stations and battery points, allowing approvals within 15 days.
Registration fees have been set at Rs50,000 to encourage local and foreign investment.
Prime Minister Sharif, while presiding over a meeting in Islamabad, also praised the power division’s policy on electric vehicles, describing it as “highly encouraging.”
He emphasized that the adoption of electric vehicles would reduce foreign exchange expenditure on petrol and diesel imports while providing an environmentally friendly mode of transportation.
The PM also directed the relevant authorities to actively promote the government’s policy on electric vehicles.
 


Pakistani PM orders cooperation with Interpol against suspects running human trafficking schemes abroad

Updated 15 January 2025
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Pakistani PM orders cooperation with Interpol against suspects running human trafficking schemes abroad

  • Illegal immigration in spotlight in Pakistan since last month after five Pakistani nationals killed in boat capsize off Greek coast 
  • In 2023, hundreds, including 262 Pakistani nationals, drowned when an overcrowded vessel sank off Greek coast

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif on Wednesday called on the Federal Investigation Agency (FIA) to work with international police organization Interpol for the extradition of suspects running the “heinous business of human trafficking abroad.”

The issue of illegal immigration has been in the spotlight in the South Asian nation since last month following the death of five Pakistanis when a migrant boat capsized off the southern Greek island of Gavdos. 

The tragedy, which occurred on Dec. 14, underscored the perilous journeys many migrants undertake due to military or political conflicts in their home countries or in search of better financial prospects. 

On Wednesday, Sharif presided over a review meeting to discuss progress on actions taken against human trafficking.

“Prime Minister instructed the FIA ​​to seek cooperation from Interpol for the extradition of the most wanted smugglers running the heinous business of human trafficking abroad,” the PM’s office said in a statement. 

“Ministry of Information and Broadcasting should run an effective awareness campaign about illegal foreign travel and human trafficking.”

Authorities told Sharif dozens of traffickers had been arrested in 2024 and several government officials who were found to be facilitating them had been dismissed and several more were facing disciplinary action.

“Punitive measures are being taken against government officials involved in human trafficking,” the statement added. “Assets worth over Rs 500 million of human traffickers have been seized and the process of confiscating more is underway rapidly … Special prosecutors have been appointed to prosecute human traffickers.”

In 2023, hundreds of migrants, including 262 Pakistanis, drowned when an overcrowded vessel traveling from Libya capsized and sank in international waters off the southwestern Greek coastal town of Pylos.


Another round of talks between Imran Khan’s party, government expected tomorrow

Updated 40 min 9 sec ago
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Another round of talks between Imran Khan’s party, government expected tomorrow

  • Khan’s Pakistan Tehreek-e-Insaf party held first round of talks with government on Dec. 23, second on Jan. 2
  • Party is demanding the release of political prisoners, judicial commission to probe allegations it led violent protests 

ISLAMABAD: The political party of Pakistan’s imprisoned former Prime Minister Imran Khan will hold another round of talks tomorrow, Thursday, with the government over the release of its leader and other political activists and the formation of a judicial commission to probe accusations the party led violent protests. 

Khan’s ouster in a parliamentary vote of no-confidence in 2022 has plunged the country into long-term political crisis, particularly since the founder of the Pakistan Tehreek-e-Insaf (PTI) was jailed in August last year on corruption and other charges, on which he remains behind bars. His party and supporters regularly hold protests calling for his release, with many of the demonstrations turning violent, including one in November last year in which the government says four troops were killed and the PTI says 12 of its supporters died. 

Khan had previously rejected talks with the government, saying his party would only speak to the ‘real powerbrokers’ in Pakistan, the all-powerful army, but last month he set up a negotiating committee of top party leaders to open dialogue with the government on two main demands: the release of political prisoners and the establishment of judicial commissions to investigate PTI-led protests on May 9, 2023, and Nov. 26, 2024, in which the government says his supporters engaged in violence and arson.

The first round of talks took place on Dec. 23 and the second on Jan. 2.

“We [government committee] told them [PTI] at the last meeting that if you want a judicial commission then what terms of reference do you want, do you have any conditions on who should head it, and similarly, can you give us a list of who you consider political prisoners and then we can answer whether these are political prisoners or not,” Rana Sanaullah, a senior leader of Prime Minister Shehbaz Sharif’s PML-N party, told Pakistan’s Geo News on Wednesday.

“Hopefully, at tomorrow’s [Thursday] meeting, they will give us this list and also their conditions on the judicial commission.” 

Speaking outside a sessions court in the federal capital, PTI Chairman Gohar Ali Khan, who is also Khan’s lawyer, confirmed that another round of talks would be held with the government committee on Thursday. 

“The third session of our negotiations with the government will take place tomorrow and we will submit our written demands,” he told reporters. 

“If the government engages with sincerity and seriousness, solutions to these issues can be found. Democracy and political stability require the release and relief of political prisoners ... We hope this process will conclude soon and bring good news.”

The talks opened last month as Khan had threatened a civil dissidence movement and amid growing concerns he could face trial by a military court for allegedly inciting attacks on sensitive security installations during the May 9 protests.

The negotiations also began two days after 25 civilians were sentenced by a military court to periods of two to 10 years of “rigorous imprisonment” in connection with attacks on military facilities on May 9, 2023. Just days later on Dec. 26, another 60 civilians were sentenced by a military court to jail time ranging from 2 to 10 years in connection with the May 9 attacks.

Khan’s arrest in May 2023 in a land graft case sparked countrywide protests that saw his supporters attack and ransack military installations in an unprecedented backlash against Pakistan’s powerful army generals. Although Khan was released days later, he was rearrested in August that year after being convicted in a corruption case. He remains in prison and says all cases against him are politically motivated.