Category: Business

The most important business news, explained in a young, easy to understand way. News that affects young career professionals.

  • Pakistan suspends cryptocurrency services to combat illegal transactions

    Pakistan suspends cryptocurrency services to combat illegal transactions

    The Pakistani government announced on Wednesday that it will suspend cryptocurrency services provided over the internet in the country in order to prevent illicit digital currency transactions.

    According to Geo, the State Bank of Pakistan (SBP) and the Ministry of Information Technology have already begun the process of prohibiting cryptocurrencies, complying with the directives.

    During a briefing to the Senate Standing Committee on Finance, Dr Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, emphasised that cryptocurrency will never be legalised in Pakistan.

    She revealed that the Financial Action Task Force (FATF) has imposed restrictions on the matter, stating that the condition set by FATF is that cryptocurrency will not be legalised.

    Supporting Pasha’s stance, Sohail Jawad, the Director of SBP, stated that crypto transactions carry high risks and will therefore never be granted permission in Pakistan. He explained that cryptocurrency is a virtual currency with over 16,000 types currently in existence. Additionally, he mentioned that the market, which was valued at $2.8 trillion, has now shrunk to $1.2 trillion.

    Senator Saleem Mandviwalla from the Pakistan Peoples’ Party (PPP) expressed concerns over the billions of dollars invested in the market. In response, the SBP official reassured him by mentioning that the Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU), a financial intelligence unit aiding Pakistan in combating terrorism financing and money laundering, are actively addressing these concerns.

    Pakistan has witnessed a surge in cryptocurrency trading and mining, as evidenced by the growing interest in related social media videos and online exchange transactions.

    Although the government had previously banned trading and mining of virtual currencies in April 2018, cryptocurrency mining continues to thrive in the country, despite the closure of several mining farms.

    Most exchanges operate discreetly through undisclosed partners, evading regulatory oversight. Nevertheless, the government persists in its efforts to curtail crypto trading activities.

  • Pakistan commits to 4% annual profit on $2 billion deposit from Saudi Arabia

    Pakistan commits to 4% annual profit on $2 billion deposit from Saudi Arabia

    According to reliable sources, Pakistan has agreed to pay an annual profit of four per cent to Saudi Arabia on a deposit of $2 billion with the State Bank of Pakistan (SBP) for a duration of one year.

    This decision was made to fulfill one of the prerequisites set by the International Monetary Fund (IMF), which demanded that Pakistan secure external funding of approximately $6 billion, according to Brecorder.

    Additionally, the United Arab Emirates (UAE) has also confirmed to the IMF that it will deposit $1 billion with the State Bank of Pakistan.

    On May 10, 2023, the Finance Division presented an additional agenda item to the Federal Cabinet, informing them that the Kingdom of Saudi Arabia, through its Ministry of Finance, had agreed to deposit $2 billion with the State Bank of Pakistan for a one-year period. The proposed annual profit rate was set at 4 per cent.

    The draft Deposit Agreement, provided by the Saudi side, was sent to the Ministry of Law and Justice and the Office of the Attorney General for Pakistan for examination and clearance in accordance with the Cabinet’s decision on May 14, 2019.

    Upon approval by the Federal Cabinet, the Finance Division of the Government of Pakistan will authorize the State Bank of Pakistan to proceed with the Deposit Agreement. The Ministry of Law and Justice has given its clearance to the draft

    Agreement, subject to the completion of all necessary formalities, while the Federal Board of Revenue (FBR) has granted its approval for tax exemption.

  • IT minister denies involvement in internet suspension resulting in billion-rupee losses

    IT minister denies involvement in internet suspension resulting in billion-rupee losses

    Following the internet blackout in Pakistan, Federal Minister for Information Technology and Telecommunication Syed Amin-ul-Haque distanced his ministry from the blockage, stating that they were not taken into confidence.

    According to Geo, Haque revealed that mobile internet services were suspended without the Ministry of IT’s consultation. Since 2017, the Pakistan Telecommunication Authority (PTA) has not been under the Ministry of IT, and the PTA has been operating independently.

    The minister explained that blocking social media websites or the internet was not the solution to any issue, and he urged people to be open-minded rather than resorting to using a VPN to access blocked sites.

    Haque suggested that instead of completely blocking the internet, it could be blocked in specific areas. He emphasized that the IT sector suffered losses of billions of rupees due to internet blockages.

    The suspension of mobile broadband and restricted access to Twitter, Facebook, and YouTube occurred after violent protests arose in response to the Rangers personnel arresting Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan from the Islamabad High Court. At least ten people died, and dozens sustained injuries during the days-long protests.

    After almost a seven-day suspension, the government restored access to social media platforms such as Twitter, YouTube, and Facebook. The suspension was recommended by the interior ministry and is the longest continuous shutdown in a country that often suspends communication as a tool to quell unrest. Telecom operators suffered an approximate revenue loss of Rs820 million, which was a significant blow to the sector as the economy remained in a fragile state.

    Additionally, the government blocked major social media platforms, including Twitter and Facebook, while YouTube services were slower to control the spread of disinformation.

  • Pakistan rupee recovers by one paisa against US dollar

    Pakistan rupee recovers by one paisa against US dollar

    According to the State Bank of Pakistan (SBP), the Pakistani rupee (PKR) strengthened by Rs0.01 against the US dollar in the interbank market on Tuesday.

    The local currency managed to recover and closed at Rs284.96.

    In contrast, the dollar is being traded at Rs290 in the open market.

    It’s worth noting that the rupee had reached a record low of Rs298.93 against the US dollar last week.

    Market speculation suggests that the rupee’s gains were further supported by reduced demand for foreign currency, resulting from a significant import payment between May 9 and 11, coinciding with the period of heightened political drama in the country.

    Reports indicate that the substantial dollar payment for imports had been arranged by the oil refineries. Oil imports constitute approximately one-fourth of the total import bill for a month.

    Earlier, the rupee experienced a sharp decline of 4.71 per cent or Rs14.09 in just two days (May 10-11), hitting a record low of Rs298.93/$ due to worsening political turmoil and deteriorating law and order following the arrest of former Prime Minister Imran Khan. However, the rupee managed to recover some of its losses after Khan’s release on May 12, as ordered by the court.

  • Punjab police allocates Rs400 million for police force healthcare

    Punjab police allocates Rs400 million for police force healthcare

    Inspector General Police Punjab, Dr Usman Anwar, announced that an estimated amount of Rs300 to 400 million will be allocated towards the healthcare welfare of the police force. This funding will cover all essential medical tests and treatments for conditions such as heart diseases, kidney ailments, and other vital organ disorders.

    Dr Anwar conveyed this message through a video addressed to the police force on Monday, emphasizing the importance of health screening and the provision of medical facilities. He informed that 50 per cent of the constabulary has already undergone health screening, with certain districts achieving 100 per cent completion. The Inspector General commended the District Police Officers (DPOs) responsible for ensuring the health screening of the constabulary in their respective districts.

    During the health screening process, employees were made aware of previously undetected diseases, including hepatitis B and C. Dr Anwar assured that a treatment for Hepatitis C has been discovered, and the department will provide free treatment to all affected employees suffering from the disease.

    Regarding hepatitis B, he mentioned that a permanent cure has not yet been found, but supportive treatment options are available to benefit affected employees. In order to safeguard the remaining police force and their families from this disease, it has been decided to administer vaccinations. The police department will bear all expenses associated with this initiative.

    Dr Anwar highlighted the safety of the vaccine, stating that he will personally receive the vaccination as a testament to its reliability. These measures are being taken to prioritize the health, well-being, and treatment of police personnel. He urged the police force to stand united as an impenetrable barrier against criminals, oppressors, and terrorists. The primary duty of the police force, as stated by the Inspector General, is to protect the lives, properties, and dignity of Pakistani citizens.

    In a separate development, a sum of Rs200,000 has been allocated from the welfare fund of Punjab Police for the medical treatment of the mothers of two martyrs from the Lahore Police, Constable Ghulam Murtaza and Constable Ali Raza. Additionally, a medical grant of Rs100,000 has been approved for ASI Qadeer Akhtar of Multan Police to cover the expenses of his brain surgery.

    Furthermore, the Inspector General has authorized an honorarium for the staff working in training colleges and schools throughout the province. An amount of Rs1.25 crore will be distributed among the staff members in training institutes located in Lahore, Sihala, Multan, Rawalpindi, Farooqabad, and Sargodha.

  • ‘When will Pakistan meltdown?’ Question shocks Pak minister, might approach China for help

    ‘When will Pakistan meltdown?’ Question shocks Pak minister, might approach China for help

    Pakistan is actively exploring alternative measures to prevent a full-fledged eruption of its balance of payment crisis, as the International Monetary Fund (IMF) continues to prolong the revival of the already-delayed $6.5 billion bailout programme.

    According to The News, Pakistan may have no choice but to turn to China to devise a mechanism for rescuing its ailing economy.

    “Amid the deepening political and economic crisis in the country, the IMF has adopted a wait-and-see policy, but this approach cannot be sustained indefinitely,” sources informed the publication. “Either the IMF programme must be revived through the completion of the ninth review, or the programme will be abandoned. We will not share any further data with the IMF until the ninth review is completed,” the sources asserted.

    Multiple reports indicate that Pakistan has already urged the Fund staff to conclude the review, warning that the budgetary framework for 2023-24 will not be shared otherwise.

    Sources recounted an incident where a diplomat from a Western capital questioned a minister about the expected economic meltdown in Pakistan. “This direct question from the dignitary shocked the minister, who assured the visiting diplomat that Pakistan would never default,” the sources narrated.

    It is noteworthy that the diplomatic community has also begun inquiring about “domestic political affairs.”

    Considering these developments, independent economists are now recommending that the government make last-ditch efforts to revive the IMF programme or turn to China for a potential bailout to support the struggling economy.

    Renowned economist Dr Hafiz A Pasha, a former finance minister, expressed that if the IMF fails to make progress, Pakistan would have no alternative but to request China’s assistance in devising a mechanism to avert a full-fledged crisis. He suggested utilizing the Asian Infrastructure Investment Bank (AIIB) as a potential instrument to aid Islamabad in navigating the balance of payment crisis, acknowledging that it falls outside the AIIB’s mandate but emphasizing the need for an institution to assume the role of an Asian IMF.

    When approached, Dr Khaqan Najeeb, a former finance ministry adviser, acknowledged the efforts taken by the country to achieve macro stabilization and pave the way for the completion of the ninth review. However, he pointed out the IMF’s cautious stance due to Pakistan’s weak State Bank reserves, which currently stand at just $4.38 billion, and the precarious balance of payment position. The IMF is taking extra care to ensure that financing needs are more than adequately met, despite efforts by authorities to convince the lender in this regard.

    Dr Najeeb also highlighted the relaxation of imports, with the IMF keen for Pakistan to build reserves and ease administrative restrictions. Notably, Pakistan’s imports in April (year-on-year) have been halved to $2.9 billion, as reported by the Pakistan Bureau of Statistics.

    “The advisable solution is for the IMF to show consideration, as a staff-level agreement can facilitate commercial and multilateral inflows,” Najeeb commented, adding that Pakistani authorities could do more to ensure a robust financing plan.

    He concluded that if an agreement is not reached, the country would have to persist with heightened import restrictions, a constrained economy, and borrowing and rollovers from friendly countries wherever possible. “This is not Pakistan’s preferred option to sustain a thriving economy,” he emphasised.

  • Petrol price expected to decrease by Rs10 per litre for the next fortnight

    Petrol price expected to decrease by Rs10 per litre for the next fortnight

    The prices of petroleum products are expected to decrease starting from May 16, as the coalition government intends to provide some relief to the distressed public amidst the severe economic crisis and record inflation.

    According to reports in local media, petrol price will see a reduction of Rs10 per litre for the rest of May.

    It has been reported that the Oil and Gas Regulatory Authority (OGRA) has recommended a decrease in the prices of petroleum products. Based on these reports, the price of petrol may be reduced by Rs10 per litre, while the price of diesel is anticipated to decrease by Rs8 per litre.

    OGRA has submitted a summary to the government, and Finance Minister Ishaq Dar and other officials will seek the input of Prime Minister Shehbaz Sharif on the recommendations. The final decision will be announced today.

    The revised prices of petroleum products for the upcoming two weeks will be implemented after midnight on May 15.

    Earlier this month, the federal government announced a reduction of Rs5 per litre in the price of diesel, while the price of petrol remained unchanged. Presently, petrol is being sold at Rs282, HSD at Rs288, kerosene oil at Rs176.07, and light diesel oil at Rs164.68 per litre.

  • US embassy in Pakistan issues security warning, cancels appointments

    US embassy in Pakistan issues security warning, cancels appointments

    The US Embassy in Islamabad has announced the cancellation of all routine consular appointments scheduled for Monday due to security concerns. The embassy issued a security alert on Sunday, stating that there is a possibility of road closures and/or traffic delays, which could impede the movement of people.

    The alert clarified that although the embassy is still operational, it is limiting the movements of its personnel to official and mission-essential travel only. The US Consulates General in Karachi and Lahore, however, are open for routine consular appointments, according to the notification.

    US citizens who are traveling in-country are advised to be aware of potential disruptions to mobile phone service and have contingency communication plans in place. The embassy urges US citizens to remain vigilant and maintain good situational awareness of their surroundings. It also recommends that they pay attention to local media for security updates and planned road closures.

    Furthermore, the US embassy strongly encourages its citizens to avoid large gatherings, unnecessary travel, and comply with all established security checkpoints. It is essential to take the necessary precautions and maintain a high level of security awareness to ensure personal safety while traveling in Pakistan.

  • IMF denies seeking $8 billion fresh financing from Pakistan in bailout talks

    IMF denies seeking $8 billion fresh financing from Pakistan in bailout talks

    The International Monetary Fund (IMF) has denied recent reports that it is seeking fresh financing from Pakistan, stating that Pakistan’s external financing requirements have remained unchanged throughout talks with the Fund.

    The clarification comes after a report by the Express Tribune suggested that the IMF had increased its demand for additional financing to $8 billion, up from an unmet condition of $6 billion, in order to ensure debt repayments for the May-December 2023 period.

    According to Reuters, IMF Resident Representative Esther Pérez Ruiz confirmed that the country’s external funding requirements had not changed, and that discussions were centered around a review to unlock $1.1 billion in financing as part of a $6.5 billion IMF package.

    Despite ongoing talks, a staff-level agreement on the review has been delayed since November, and the IMF has reiterated that commitments on external financing from friendly countries will be necessary before it can release bailout funds.

    Pakistan’s central bank reserves currently stand at $4.38 billion, equivalent to barely a month’s worth of imports.