Category: Business

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

  • PKR strengthens 9 paisa against US dollar, weakens 71 paisa versus British Pound

    PKR strengthens 9 paisa against US dollar, weakens 71 paisa versus British Pound

    The Pakistani rupee (PKR) saw a marginal gain against the US dollar (USD) in the inter-bank market on Thursday, appreciating by 0.03 per cent.

    By the close of the trading day, the rupee settled at 278.68, marking an increase of Re0.09 compared to Wednesday’s closing value of 278.77, according to data from the State Bank of Pakistan (SBP).

    Here is a comparison of the last two closing rates, detailing PKR’s performance against various currencies aside from the US dollar. Below are the closing rates for Thursday and Wednesday, highlighting the changes in value:

    Currency Thursday’s closing Difference Wednesday’s closing
    Saudi Riyal 74.24 -0.03 74.27
    UAE Dirham 75.90 +0.03 75.87
    Euro 308.95 +0.87 308.08
    British Pound 366.39 +0.72 365.67
    Swiss Franc 329.15 +0.74 328.41
    Japanese Yen 1.9402 +0.02 1.9209
    Chinese Yuan 39.25 +0.06 39.19
    Exchange rates comparison

    In terms of other currencies, the Saudi Riyal experienced a slight decline, closing at 74.24 after losing 3.63 paisa from its previous value of 74.27. Similarly, the UAE Dirham depreciated by 2.5 paisa, ending the day at 75.90 compared to 75.87 on Wednesday.

    Meanwhile, the rupee weakened against the Euro, losing 87.39 paisa to close at 308.95, compared to 308.08 in the previous session. The British Pound also saw a rise, becoming 71.57 paisa more expensive, closing at 366.39 from the previous day’s 365.67.

    The Swiss Franc appreciated by 74.5 paisa, closing at 329.15, up from 328.41. In contrast, the Japanese Yen saw the rupee weaken by 1.93 paisa, ending the day at 1.9402 compared to 1.9209.

    The Chinese Yuan strengthened against the PKR, gaining 5.58 paisa and closing at 39.25, up from 39.19.

    In recent months, the Pakistani rupee has fluctuated between 277 and 279, with traders closely monitoring developments related to the International Monetary Fund’s (IMF) Executive Board decision on the $7-billion Extended Fund Facility (EFF).

    For the current financial year, the rupee has depreciated by 33.38 paisa or 0.12 per cent against the dollar. However, in the calendar year so far, it has appreciated by Rs3.19, or 1.14 per cent

  • Exchange rates: Pakistani rupee falls 5.69 paisa against US dollar, 37 paisa against Pound

    Exchange rates: Pakistani rupee falls 5.69 paisa against US dollar, 37 paisa against Pound

    The Pakistani rupee (PKR) edged down by 5.69 paisa, or 0.02 per cent, against the US dollar (USD) in Tuesday’s interbank market, closing the day at PKR 278.70 per USD, slightly lower than the previous close of 278.64.

    Throughout the day, the currency exhibited minimal movement, with an intraday high of 278.90 and a low of 278.65.

    In the open market, exchange companies quoted the dollar at PKR 278.97 for buying and PKR 279.75 for selling, according to forex dealers.

    The PKR’s performance against other major currencies was mixed on Tuesday:

    Currency Previous Rate Today’s Rate Change
    Chinese Yuan 39.20 39.16 3.91 paisa
    British Pound 366.10 365.72 37.11 paisa
    Euro 308.44 308.19 25.75 paisa
    Saudi Riyal 74.25 74.27 1.32 paisa
    Swiss Franc 328.10 326.67 1.43 rupees
    Japanese Yen 1.9019 1.9091 0.72 paisa
    UAE Dirham 75.88 75.86 1.55 paisa
    Exchange rates for Tuesday

    – The Chinese Yuan fell by 3.91 paisa, closing at 39.16 from the previous session’s 39.20.

    – The British Pound declined by 37.11 paisa, ending at 365.72 compared to 366.10 the day before.

    – The PKR gained 25.75 paisa against the Euro, closing at 308.19 from 308.44.

    – The Saudi Riyal strengthened by 1.32 paisa, closing at 74.27 from 74.25.

    – The Swiss Franc dropped by 1.43 rupees, closing at 326.67 compared to 328.10 previously.

    – Against the Japanese Yen, the PKR slipped by 0.72 paisa, ending at 1.9091 versus 1.9019.

    – The U.A.E Dirham saw a slight increase of 1.55 paisa, closing at 75.86 from 75.88.

    So far this financial year, the PKR has depreciated against the dollar by 35.88 paisa, or 0.13 per cent. However, on a calendar-year basis, the rupee has appreciated by 3.16 rupees, or 1.13 per cent.

  • Gold price slips to Rs261,500 per tola in Pakistan amid global weakness

    Gold price slips to Rs261,500 per tola in Pakistan amid global weakness

    Gold prices in Pakistan fell on Tuesday, mirroring a decrease in international rates. In the local market, the price of gold per tola dropped by Rs1,000, bringing it down to Rs261,500, according to figures from the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

    The price of 10-gramme gold also decreased, shedding Rs857 to settle at Rs224,194. This decline follows a period of stability, as gold prices remained unchanged at Rs262,500 per tola on Monday.

    Last month, gold prices in Pakistan reached an all-time high of Rs263,700 per tola, causing concern among non-investors, potential buyers, and individuals purchasing the precious metal for weddings or as a safeguard for their earnings.

    On the international front, gold prices also saw a reduction on Tuesday. APGJSA reported that the international rate stood at $2,498 per ounce (including a $20 premium), marking a decrease of $5 for the day.

    Meanwhile, silver prices remained stable at Rs2,950 per tola.

  • Pakistan on verge of finalising $7 billion IMF loan deal, FinMin updates on progress

    Pakistan on verge of finalising $7 billion IMF loan deal, FinMin updates on progress

    Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, announced on Tuesday that the government is nearing the finalisation of external financing assurances, a crucial step toward securing the $7 billion loan from the International Monetary Fund (IMF).

    Speaking at a briefing, Aurangzeb expressed confidence that the IMF’s Executive Board would approve the programme soon, acknowledging the support from provincial governments.

    Aurangzeb reiterated Prime Minister Shehbaz Sharif’s assertion that this would be Pakistan’s last programme with the IMF, underlining the necessity of implementing structural reforms to ensure long-term economic stability.

    In July, Pakistan and the IMF reached a staff-level agreement on a 37-month Extended Fund Facility (EFF) worth around $7 billion. However, the programme’s approval by the IMF’s Executive Board is contingent on Pakistan securing financing assurances from its development partners, a process that is still ongoing.

    Pakistan is actively working to secure a rollover of $12 billion in loans from key allies, including China, Saudi Arabia, and the UAE. Additionally, the country has requested an extra $1.2 billion loan from Saudi Arabia to address a $2 billion financing gap.

    Aurangzeb highlighted improvements in economic indicators, noting that the government has cleared all pending payments, including import letters of credit and profit remittances.

    He pointed out that inflation has decreased to 9.6 per cent in August 2024 from 23.7 per cent in the same period last year, leading to a gradual reduction in the policy rate, which is providing relief to the industrial sector.

    The Minister also cited improvements in Pakistan’s credit ratings by agencies like Fitch and Moody’s as evidence of the economy’s positive trajectory.

    On tax collection, Aurangzeb emphasised the government’s determination to increase revenue, noting that a significant portion of the economy contributes minimally to the tax base. He stressed the need for broader tax compliance and assured that the Federal Board of Revenue (FBR) has simplified the tax filing process.

    Despite a shortfall of Rs 98 billion in tax collection during the first two months of the fiscal year, he reaffirmed the government’s commitment to not delay necessary processes.

    Aurangzeb also addressed rightsizing the federal government and introduced plans for a new subsidy mechanism aimed at enhancing transparency.

    He reassured stakeholders that any decisions regarding the Utility Stores Corporation (USC) would be made with employee and stakeholder interests in mind, emphasising the government’s commitment to protecting jobs and well-being.

  • IMF urges Punjab to end electricity subsidy, imposes more conditions

    IMF urges Punjab to end electricity subsidy, imposes more conditions

    The International Monetary Fund (IMF) has put forward at least three strict conditions in Pakistan after the Punjab province gave Rs45 to Rs90 billion in electricity subsidies for two months.

    Last month, President of Pakistan Muslim League-Nawaz Muhammad Nawaz Sharif announced that Punjab government would provide relief of fourteen rupees per unit to consumers using up to 500 units of electricity in August and September bills.

    The IMF has asked the province to end the temporary subsidy by September 30th while also clarifying that no province w
    could give such a subsidy during the 37-month Extended Fund Facility (EEF) programme.

    According to IMF, it was one of the conditions for the bailout that no provinces would take such a move. This brings into question Prime Minister Shehbaz Sharif’s previous statement when he encouraged other provinces to follow suit of Punjab.

    Tribune reported that the IMF also introduced the condition that would bind the provinces to not introduce any fiscal policy that could undermine the commitments given under $7 billion loan.

    The provinces have committed to signing a National Fiscal Pact by the end of September, which would mean they undertake some expenditures that are currently the federal government’s responsibility.

  • Inflation eases to 9.6% in August, first single-digit rate since October 2021

    Inflation eases to 9.6% in August, first single-digit rate since October 2021

    Pakistan’s inflation rate dropped to 9.6 per cent in August 2024, a significant decrease from the 11.1 per cent recorded in July 2024, according to data from the Pakistan Bureau of Statistics (PBS).

    This marks the first time in three years that inflation has returned to single digits, with the last instance being in October 2021 when it stood at 9.2 per cent.

    On a month-to-month basis, the Consumer Price Index (CPI) saw a modest rise of 0.4 per cent in August 2024, compared to a 2.1 per cent increase in July 2024 and a 1.7 per cent rise in August 2023.

    This slowdown in monthly inflation aligns with the predictions of the Ministry of Finance, which had anticipated inflation to fall between 9.5 per cent and 10.5 per cent in its recent economic outlook.

    The Finance Ministry also suggested that if the current economic stability continues, inflation could drop further to between 9 per cent and 10 per cent by September 2024.

    This decline in inflation follows the State Bank of Pakistan’s (SBP) decision to reduce the key policy rate by 100 basis points to 19.5 per cent in July.

    The SBP had warned of potential inflation risks due to fiscal issues and sudden changes in energy prices, but the recent figures show a positive trend.

    Inflation has been a major issue for Pakistan, especially after hitting a record high of 38 per cent in May 2023. However, it has been steadily decreasing since then.

    The recent inflation data also matched projections from various financial institutions. JS Global, a brokerage firm, had predicted a 9.3 per cent inflation rate, noting that this would be the first time in three years that inflation dropped into single digits.

    They believe this trend could lead to further interest rate cuts, with the policy rate possibly dropping to 18 per cent in September 2024.

  • PM Shehbaz hails Moody’s rating upgrade amid cooling inflation

    PM Shehbaz hails Moody’s rating upgrade amid cooling inflation

    Prime Minister Shehbaz Sharif on Sunday expressed his satisfaction with the recent ease in the inflation rate, noting that the government’s ongoing economic reforms are yielding positive results.

    In a recent statement, PM Shehbaz highlighted that the recent upgrade in Pakistan’s credit rating by Moody’s was a clear acknowledgment of the country’s improving economic indicators. He said that international institutions are recognising the progress Pakistan is making.

    Moody’s Ratings recently upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings from Caa3 to Caa2. This upgrade reflects slightly better macroeconomic conditions, alongside improved government liquidity and external positions, which, although still weak, have shown improvement. According to Moody’s, Pakistan’s default risk has now decreased.

    Read more: Govt notifies Rs1.86 per litre ‘reduction’ in petrol price for next fortnight

    This development follows another upgrade in July when Fitch Ratings pushed Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘CCC’ to ‘CCC+’.

    The Prime Minister expressed satisfaction with the Consumer Price Index (CPI) easing to 11 per cent in July, and he anticipates that it will decline further in August. He reiterated the government’s commitment to pursuing economic reforms, including a right-sizing policy, which he is personally overseeing to ensure rapid implementation.

    PM Shehbaz expressed confidence that the reforms would soon have a noticeable positive impact on the country’s economy. He reassured the public that the government is fully aware of the challenges faced by the people and is working to address them.

  • Govt notifies Rs1.86 per litre ‘reduction’ in petrol price for next fortnight

    Govt notifies Rs1.86 per litre ‘reduction’ in petrol price for next fortnight

    The government has marginally reduced petrol prices by Rs1.86 per litre for the next two weeks, following approval from Prime Minister Shehbaz Sharif.

    This slight decrease falls short of the anticipated Rs6 per litre, with many Pakistanis expecting a reduction of at least Rs3.10 per litre.

    Effective from September, the new petrol price in Pakistan will be Rs259.10 per litre, down from Rs260.96. The price of high-speed diesel (HSD) has also been lowered by Rs3.32 per litre, bringing it down to Rs262.75 from Rs266.07.

    Additionally, the prices of kerosene oil and light diesel oil have been cut by Rs2.15 and Rs2.97 per litre, respectively, reducing their prices to Rs169.62 and Rs154.05 per litre.

    Read more: Exchange rates: PKR gains 10 paisa against US dollar, Rs2.35 versus Swiss Franc

    This marks the third consecutive reduction in petroleum product prices, with a total decrease of Rs16.5 per litre for petrol since July 30. In the previous fortnightly review, petrol and diesel prices were reduced by Rs8.47 and Rs6.70 per litre, respectively.

    It remains unclear whether this minimal price reduction will impact public transport fares or ride-hailing services, and it is unlikely to significantly ease daily commuting costs for motorists. Nonetheless, the prices are decreasing rather than rising.

  • Pakistan’s inflation expected to drop to as low as 9% by September 2024: Finance Ministry

    Pakistan’s inflation expected to drop to as low as 9% by September 2024: Finance Ministry

    Pakistan’s headline inflation is expected to ease further in August 2024, settling between 9.5 per cent and 10.5 per cent, with a continued downward trend anticipated in the coming months, according to the Finance Division’s statement on Friday.

    The Ministry of Finance, in its ‘Monthly Economic Update and Outlook’, highlighted that the inflation rate could drop even further to between 9 per cent and 10 per cent by September 2024, attributed to the stabilisation of key economic indicators.

    July 2024 saw headline inflation at 11.1 per cent year-on-year, a decrease from 12.6 per cent in June 2024. This marks the lowest Consumer Price Index (CPI) figure since November 2021, when inflation was recorded at 11.5 per cent, as per data from the Pakistan Bureau of Statistics (PBS).

    The Finance Ministry’s report also pointed to positive trends in external indicators such as exports, imports, and workers’ remittances, which are on an upward trajectory.

    A brokerage house noted that August’s inflation figure is expected to dip into single digits for the first time in nearly three years.

    Read more: Exchange rates: PKR up by over 10 paisa against dollar

    Looking ahead, the report projects that exports will range between $2.5 billion and $3.2 billion, imports between $4.5 billion and $5 billion, and remittances between $2.6 billion and $3.3 billion in August 2024.

    The stable outlook for the external sector is contingent upon factors including a stable exchange rate, revived domestic economic activities, improved agricultural output, lower domestic and global commodity prices, and increased foreign demand.

    In the industrial sector, the Ministry of Finance anticipates that the Large Scale Manufacturing (LSM) sector will maintain its positive growth trajectory in FY2025, driven by improved external demand, a stable exchange rate, declining inflation, and a more accommodating monetary policy.

  • Exchange rates: PKR gains 10 paisa against US dollar, Rs2.35 versus Swiss Franc

    Exchange rates: PKR gains 10 paisa against US dollar, Rs2.35 versus Swiss Franc

    The Pakistani rupee (PKR) continued its trend of minimal fluctuations, appreciating by 10.44 paisa or 0.04 per cent against the US dollar (USD) during Friday’s interbank session.

    The PKR closed at 278.54 per USD, up from the previous close of 278.64 on Thursday.

    Interbank closing rate for August 30, 2024

    In the open market, exchange companies quoted the dollar at 279.15 for buying and 280 for selling. Throughout the day, the currency reached an intraday high (bid) of 279 and a low (ask) of 278.90.

    Over the week, the PKR recorded a total loss of 4 paisa against the greenback.

    Here’s how Pakistani currency performed on last trading day of the week against other currecnies:

    Currency Friday’s value Change Thursday’s value
    Saudi Riyal 74.23 -2.78 paisa 74.26
    UAE Dirham 75.86 +2.85 paisa 75.84
    Euro 308.8 -79.84 paisa 309.6
    Swiss Franc 328.41 -2.35 rupees 330.75
    British Pound 367.35 -72.28 paisa 368.07
    Japanese Yen 1.921 -0.5 paisa 1.926
    Chinese Yuan 39.29 +9.14 paisa 39.2
    Exchange rates for Friday

    Against major currencies, the Saudi Riyal closed at 74.23, losing 2.78 paisa from the previous day’s value of 74.26. The UAE Dirham decreased by 2.85 paisa, closing at 75.86, down from 75.84.

    Meanwhile, the PKR gained 79.84 paisa against the Euro, closing at 308.8 compared to the previous value of 309.6. The Swiss Franc dropped by 2.35 rupees, ending the session at 328.41, down from 330.75.

    The British Pound became cheaper by 72.28 paisa, closing at 367.35 compared to 368.07 the day before. Against the Japanese Yen, the PKR gained 0.5 paisa, closing at 1.921 versus 1.926 the previous day. The Chinese Yuan saw an increase of 9.14 paisa, closing at 39.29 compared to 39.2 in the previous session.

    In recent months, the domestic currency has remained in the range of 277-279, with traders closely monitoring the approval of a new $7-billion Extended Fund Facility by the International Monetary Fund’s (IMF) Executive Board.

    During the current financial year, the PKR has depreciated against the dollar by 19.67 paisa or 0.07 per cent. However, the currency has appreciated by 3.32 rupees or 1.19 per cent in the current calendar year.