ISLAMABAD: Fitch Ratings, a global credit rating agency, has upgraded Pakistan’s long-term foreign currency issuer default rating (IDR) to ‘CCC+,’ the agency said on Monday, indicating an increase in the country’s foreign exchange reserves, while the central bank cut the key interest rate by 100 basis points to 19.5 percent in line with expectations of investors and analysts.
Fitch Ratings provides independent opinions on the creditworthiness of issuers and their debt obligations by evaluating the likelihood of repayment, and assigns ratings to help investors assess the risk of lending to or investing in a particular entity.
The upgrade reflects greater certainty over continued availability of external funding, in the context of Pakistan’s staff-level agreement with the International Monetary Fund (IMF) on a new 37-month, $7 billion extended fund facility (EFF).
“Strong performance on the previous, more temporary IMF arrangement helped the country narrow fiscal deficits and rebuild foreign exchange (FX) reserves, and further improvements are likely,” the ratings agency said in its report.
But it said the South Asian nation’s large funding needs put it in a “vulnerable situation,” if it failed to implement challenging reforms that could undermine program performance and funding.
“The government will have to obtain new funding assurances from bilateral partners, chiefly Saudi Arabia, the United Arab Emirates and China, totalling about USD 4-5 billion over the duration of the EFF,” the report read.
“We believe this will be achievable, given the strong past record of support and significant policy measures in the recent budget for the fiscal year ending June 2025 (FY25).”
Fitch said the incumbent Pakistani government aimed to tackle weaknesses in the country’s tax system, energy sector and state-owned enterprises under the new EFF through higher taxes on the country’s agricultural sector.
“We forecast the current account deficit to stay relatively contained at about $4 billion (about 1 percent of GDP) in FY25, after about $700 million in FY24, given tight financing conditions and subdued domestic demand,” the agency said.
Finance Minister Muhammad Aurangzeb said the rating upgrade came in the backdrop of currency stabilization, increase in foreign reserves and decline in inflation in Pakistan.
“This is a reflection of that journey in which we have been working hard for the last four to five months to get more permanence in the macroeconomic stability. Especially now with the staff-level agreement [with the IMF] having been in place, it has played a very important role in terms of helping with this upgrading,” he said in televised comments.
The minister said all macro-economic indicators in the country were “positive” and “in the right direction.”
“This [rating upgrade] is important because if we are to make this the last [IMF] program, there has to be a road to the market,” he said.
“As I also mentioned yesterday, export-led growth, foreign direct investment, which is again very much dependent on sovereign ratings, especially that foreign direct investment that can take us to exports and finally international capital markets, therefore, this particular upgrading is the beginning of that journey.”
‘GOOD NEWS FOR INDUSTRY’
The Fitch report came as Pakistan cut its key interest rate by 100 basis point to 19.5 percent, according to the central bank.
Finance Minister Aurangzeb described the rate cut as a “very good news for the industry.”
“As the inflation will decrease gradually, we will see the policy rate coming further down during this fiscal year. So that we go back into the private sector credit off-take, which has been stagnant for long,” he said in his televised comments.
“Both these developments that happened today, they are very positive for the economy as we go forward.”
The decision to cut policy rate was made in view of a decline in inflation, improving current account deficit and an increase in central bank reserves, according to the central bank chief.
“The current account deficit was $17.5 billion in fiscal year 22, which was reduced to $3.3 billion in 2023. This year, that number is only $700 million, which is 0.2 percent of the GDP,” State Bank of Pakistan (SBP) Governor Jameel Ahmed said at a press conference.
“Along with this, the state bank reserves have also witnessed improvement. In June 2023, our reserves were $4.4 billion, which have increased to $9.5 billion in June this year.”
He noted the country’s oil imports had gradually decreased and an improvement in external account inflows had strengthened the current account.
“Oil imports, which were at $2.3 billion in the first quarter of 2023, came down to $1.4 billion in the last quarter (Apr-Jun 2024),” Ahmed said. “This fiscal year, our GDP growth, which was 2.4 percent in the outgoing year, our assessment is that it will be between 2.5 percent and 3.5 percent.”
Similarly, the SBP chief said, the current account deficit was projected to be 0-1 this fiscal year, while average inflation would be 11.5-13.5 percent.
Fitch upgrades Pakistan’s foreign-currency debt rating, central bank cuts key interest rate
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Fitch upgrades Pakistan’s foreign-currency debt rating, central bank cuts key interest rate
- Fitch Ratings says Pakistan’s large funding needs put it in ‘vulnerable situation’ if it failed to implement reforms under new IMF deal
- Report came as Pakistan cut key interest rate by 100to 19.5 percent amid decline in inflation, improving current account, increase in reserves
Pakistan court directs government to engage with Imran Khan’s party over Nov. 24 protest
- Islamabad High Court says law and order remains government’s priority if there is no breakthrough
- Chief Justice Aamer Farooq hopes PTI will have ‘meaningful communication’ with the administration
ISLAMABAD: The Islamabad High Court (IHC) on Thursday directed the government to form a committee to engage in talks with Pakistan Tehreek-e-Insaf (PTI) leadership regarding the party’s planned protest in Islamabad on Nov. 24, emphasizing the need to avoid disruptions during the visit of the Belarusian president.
IHC Chief Justice Aamer Farooq issued the directive while hearing a petition by local trade association, instructing the government to constitute the committee that is preferably headed by Interior Minister Mohsin Naqvi, with Islamabad Chief Commissioner Muhammad Ali Randhawa and other officials.
The committee is tasked with negotiating with PTI leaders to address the “sensitivity over the weekend due to the movement of the President of a foreign country.”
“It would be appropriate that respondent No. 1 (government) constitute the committee ... to engage with the leadership of respondent No. 5 (PTI party), informing them of the sensitivity over the weekend,” said the court.
“In case no breakthrough is made, the law and order is the responsibility of respondents No. 1,” it continued, adding: “In this regard, no protest or rally or for that matter sit-in shall be allowed.”
Chief Justice Farooq urged the government to maintain law and order in Islamabad with “minimum disruption to the life of ordinary citizens,” expressing hope that PTI would “engage in meaningful communication” with the committee.
The court also directed a report on the matter to be submitted at the next hearing, scheduled for Nov. 27.
The directive followed a petition filed by Jinnah Super Traders Association (JSTA) President Asad Aziz, who sought the court’s intervention to prevent the PTI protest, citing disruptions to daily life and financial losses for the business community.
“Islamabad is a very expensive city with high property and rent prices,” Aziz told Arab News. “If your business is shut on top business days, how can these businessmen survive?“
He highlighted the financial strain caused by protests, particularly for shopkeepers in areas like Super Market, Jinnah Super Market and Blue Area.
Aziz claimed that 20 percent of shopkeepers had shut their businesses in recent months due to recurring disruptions caused by political demonstrations.
Protests in Islamabad have frequently caused disruptions to their lives of it residents. In September, a similar PTI demonstration led the government to lock down the city with containers, creating significant inconvenience for people and business owners.
Earlier this year, Pakistan’s parliament passed a law regulating public gatherings in Islamabad, specifying timings for rallies and designating specific areas. The law prescribes three-year jail terms for participants in illegal assemblies and 10-year imprisonment for repeat offenders.
Pakistan’s interior ministry has already approved the deployment of paramilitary forces in Islamabad to manage the anticipated law and order situation during the protests.
The security situation has also become a paramount concern due to Belarusian President Aleksandr Lukashenko’s three-day visit to Islamabad starting Monday, during which several investment deals and memorandums of understanding are expected to be signed between the two countries.
In rare message, Imran Khan’s wife says he won’t seek revenge if back in power
- Bushra Bibi says the protest date will only change from Nov. 24 if Khan shares another public course of action
- Her message marks a rare foray into the public eye, underscoring her emerging role as a central PTI figure
ISLAMABAD: In a rare public message on Thursday, Bushra Bibi, the wife of Pakistan’s jailed ex-prime minister Imran Khan, assured state institutions he harbors no plans for revenge upon returning to power, as she rallied support for a protest planned by Pakistan Tehreek-e-Insaf (PTI) next week.
The PTI is organizing the rally in Islamabad on November 24, demanding Khan’s release, who has been in prison since August last year following his arrest on corruption charges.
The protest also aims to highlight the party’s allegations of electoral rigging in the February 8 general elections. The planned demonstration reflects the deepening political polarization in Pakistan, with Khan’s supporters and other political factions locked in an increasingly bitter political conflict.
Khan’s combative rhetoric against state institutions, including the powerful military— whom he has accused of orchestrating his ouster in an April 2022 no-confidence vote— has further entrenched divisions.
Despite his incarceration, Khan has remained defiant, which many interpret as evidence of his determination to seek retribution against rivals if he regains power. In her video message, however, Bibi dismissed the perceptions, emphasizing Khan’s commitment to forgiveness and unity.
“I want to tell the [state] institutions that it is completely wrong to think that Khan will take revenge on anyone,” she said in the video. “Khan says taking revenge on people after coming into power is akin to inviting God’s displeasure.”
“He has said that the time he has spent in jail has brought him closer to God,” she continued. “He has also said that he has learned that when you come into power, you should open the door to forgiveness, not the door to oppression.”
Bibi’s appeal marked a rare foray into the public eye, underscoring her emerging role as a central figure in the PTI’s efforts to build momentum for Khan’s release. She remained in the same jail with Khan in a case involving the illegal sale of state gifts before her release on bail in October.
Bibi called on party supporters to participate in the November 24 rally, saying there was no plan to change the protest date.
“The date can only be changed on one condition that Khan comes out and himself announces the next course of action to the public,” she said. “Otherwise, under no circumstances can the date of Nov. 24 be changed.”
Khan’s arrest and imprisonment have become a flashpoint for political tensions in Pakistan. The PTI alleges that the cases against Khan are politically motivated, aimed at sidelining the former premier and dismantling his party.
Meanwhile, the coalition government has taken measures to suppress PTI’s rallies, citing concerns over public safety and order, particularly in light of the planned protest in Islamabad.
Bibi asked people to come out and protest in her message, calling it their duty to fighter for the rule of law in the country.
Pakistan government open to talks with Imran Khan’s party, refuses to allow Nov. 24 protest
- Interior Minister Mohsin Naqvi says negotiations cannot take place amid ‘threats’ from PTI
- He says it is not possible to allow a rally in Islamabad ahead of a Belarusian delegation visit
ISLAMABAD: Pakistan’s Interior Minister Mohsin Naqvi on Thursday suggested the government was open to talks with former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party but ruled out allowing its planned protest in Islamabad on November 24, ahead of a high-level visit by a Belarusian delegation.
The PTI has announced a “long march” to Islamabad on November 24, primarily demanding the release of Khan, who has been imprisoned since August last year on charges the party contends are politically motivated.
Additionally, the party’s protest is also meant to raise its voice against alleged rigging in the February 8 general elections while calling for measures to ensure judicial independence, which it believes has been undermined by the 26th constitutional amendment.
On Monday, Islamabad’s district magistrate imposed a two-month-long ban on gatherings of more than five people in the capital, invoking Section 144 of the Code of Criminal Procedure. This provision allows the government to prohibit political assemblies, rallies, demonstrations, sit-ins and other activities for a specified period.
Addressing the media in Islamabad, the interior minister said the government was fully prepared to stop the protest, with Punjab police, Rangers and Frontier Constabulary (FC) troops assisting the Islamabad police in operational duties.
“Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur and Barrister Gohar Khan met Imran Khan twice in the past two days,” Naqvi said, amid speculation that the PTI leaders discussed the option of negotiating with the government. “If they wish to initiate talks [with the government], they should do it. If they want to hold talks, they should tell us.”
The minister added, however, that no talks were possible if the PTI headed to Islamabad and “wielded sticks against us” on November 24.
“Let me tell you one thing: negotiations don’t take place with threats, though I personally feel talks should take place between everyone,” he said.
In response to a question, Naqvi clarified that no talks were currently underway with Khan, who is facing a new case related to violence at a PTI rally that took place in September while the ex-premier was in jail.
Highlighting the upcoming visit of Belarus President Alexander Lukashenko and his 10 cabinet ministers to Pakistan on a three-day visit next week, Naqvi said no permission could be granted for any rally or protest in the federal capital.
He added that a decision on whether to suspend mobile signals in Islamabad ahead of the protest would be finalized by Friday night.
Just a day earlier, it emerged that Pakistan’s interior ministry had authorized the deployment of paramilitary Punjab Rangers and FC forces in Islamabad since November 7 to maintain law and order.
Pakistan’s parliament also passed a law earlier this year to regulate public gatherings in Islamabad, specifying timings for rallies and designating specific areas. The law prescribes three-year jail terms for participants in illegal assemblies and 10-year imprisonment for repeat offenders.
Pakistani stocks surge past 97,000 as investor confidence grows on economic reforms
- Analysts attribute rally to strong economic data, rising optimism over government reforms
- Stock market has remained bullish since the government slashed policy rate in November
ISLAMABAD: The Pakistan Stock Exchange (PSX) on Thursday gained 1,700 points, surging past the 97,000 mark during intra-day trading for the first time, with analysts attributing the rally to strong economic data and rising investor optimism over government reforms.
The benchmark KSE-100 index rose by 1,781.94 points, or 1.86 percent, to close at 97,328.39. It touched an unprecedented peak of 97,437.15 during intra-day trading.
Analyst Ahsan Mehanti of Arif Habib Corporation said surging foreign exchange reserves and speculations over the government’s decisions on economic reforms and privatization “played a catalyst role in the record surge at the PSX.”
“Stocks are bullish, led by scrips across the board as investors weigh a drop in government bond yields and robust economic data for current account surplus, remittances, exports and foreign direct investments,” Mehanti told Arab News.
In October, Pakistan’s external current account recorded a surplus of $349 million, marking the third consecutive month of surplus and the highest in this period. The current account reflects a nation’s transactions with the world, encompassing net trade in goods and services, net earnings on cross-border investments and net transfer payments.
A surplus indicates that a country is exporting more than it is importing, thereby strengthening its foreign exchange reserves.
A bullish trend has been observed in the stock market since Pakistan’s central bank cut its key policy rate by 250 basis points, bringing it to 15 percent earlier this month. Economic indicators have also steadily improved since securing a 37-month, $7 billion bailout from the International Monetary Fund (IMF) in September.
In the past, the country faced a prolonged economic crisis that drained its foreign exchange reserves and saw its currency weaken amid double-digit inflation. Last year, Pakistan narrowly avoided a sovereign default by clinching a last-minute $3 billion IMF bailout deal.
Saudi mission in Pakistan condemns militant attack that killed 12 soldiers this week
- The embassy extends condolences to victims’ families and the Pakistani people in a statement
- The statement reiterates the kingdom’s position ‘rejecting all forms of violence and terrorism’
ISLAMABAD: The Saudi embassy in Pakistan on Thursday condemned a militant attack on a joint security checkpoint in the northwestern Khyber Pakhtunkhwa province that killed 10 army soldiers and two Frontier Constabulary (FC) personnel, extending condolences to the victims’ families and the Pakistani people.
The attack, which occurred on Tuesday, targeted a joint army and paramilitary check post in the Mali Khel area of Bannu District, where militants detonated an explosive-laden vehicle after troops repelled their attempt to storm the post, according to the Pakistan military. Six militants were killed during the exchange of gunfire that followed.
“The Embassy expresses the Kingdom of Saudi Arabia’s condemnation of the attack on a joint checkpoint in the city of Bannu in the Khyber Pakhtunkhwa province of Pakistan, which resulted in the death and injury of a number of people,” the Saudi diplomatic mission in Islamabad said in a statement.
“The Embassy reiterates the Kingdom’s position rejecting all forms of violence and terrorism,” it added. “The Embassy extends its deepest condolences and sincere sympathy to the families of the victims, the government and the people of Pakistan, and wishes the injured a speedy recovery.”
Pakistan’s northwestern Khyber Pakhtunkhwa province has experienced a resurgence of militant violence in recent months, with a growing number of attacks on security forces and infrastructure despite the country’s efforts to combat militancy.
The region has long been a hotspot for insurgent activity, with militants frequently targeting military and paramilitary personnel.
Saudi Arabia has consistently expressed its support for Pakistan’s fight against extremist violence, emphasizing the importance of international cooperation to tackle militancy and ensure regional stability.
