Tag: decline

  • Pakistan’s forex reserves witness a dip of $127 million

    Pakistan’s forex reserves witness a dip of $127 million

    In a recent report, it was revealed that the foreign exchange reserves held by the State Bank of Pakistan (SBP) experienced a decline of $127 million during the week ending January 12, settling at $8.03 billion.

    The country’s total liquid foreign reserves, including those held by commercial banks, amounted to $13.15 billion. Specifically, commercial banks held net foreign reserves of $5.12 billion.

    The SBP attributed the reduction in reserves to debt repayments, stating, “During the week ending on January 12, 2024, the SBP’s reserves decreased by US$ 127 million to US$ 8,027.4 million due to debt repayments.”

    Notably, the previous week had also seen a decrease in Pakistan’s central bank reserves, amounting to $66 million.

    In a significant development, Pakistan received a tranche of $705.6 million from the International Monetary Fund (IMF), as confirmed in a statement by the SBP on Wednesday.

    The central bank stated, “The SBP has received SDR 528 million (equivalent to $705.6 million) on January 16, 2024, from the IMF following the successful completion of the first review by the Executive Board of the IMF under Standby Arrangement (SBA).”

    The impact of this disbursement will be reflected in the central bank reserves for the week ending January 19.

  • Pakistani rupee drops to Rs295 against US dollar

    Pakistani rupee drops to Rs295 against US dollar

    It appears that the Pakistani rupee is poised to shatter previous records and reach an new all-time low, as the local currency continued its decline against the US dollar on Wednesday, decreasing by 1.16 per cent in the inter-bank market.

    By the end of the day, the rupee settled at Rs294.93 against the US dollar, marking a decline of Rs3.42, as reported by the State Bank of Pakistan (SBP).

    This represents its lowest point since May 11 of this year, when it hovered near Rs299.

    Just one day prior, on Tuesday, the rupee also experienced a setback against the US dollar, concluding at Rs291.51.

  • Threads’ hype cools as user activity drops by 79%

    Threads’ hype cools as user activity drops by 79%

    Threads, Meta’s social media application, burst onto the scene in early July, making an impressive debut with an astonishing 5 million user registrations mere hours after its launch. This rapid uptake established it as the most swiftly downloaded app, with a staggering 100 million individuals signing up within the span of just one week.

    However, the initial excitement surrounding Threads has since fizzled out, as evidenced by the declining daily usage of the app.

    Despite its promising start, Threads is grappling with a marked reduction in user engagement. Data from Similarweb shows a notable drop of 79 per cent in active users from its peak of 2.3 million in July to 576,000 by August 7. This waning user activity raises concerns for Meta, given the initial buzz and rapid user acquisition.

    Moreover, significant brands such as Wendy’s, Anthropologie, and Rare Beauty are scaling back their presence on Threads, with reports of “Threads fatigue” indicating dissatisfaction with the platform’s performance.

    Threads’ struggle to compete with Twitter is evident, as even at its peak, Threads had less than half the daily users of Twitter, which boasts over 100 million active users. This discrepancy underscores the challenge Threads faces in unseating Twitter as the leading text-based social media platform.

    Threads was initially positioned to capitalise on the turmoil at Twitter following Elon Musk’s takeover. However, Twitter’s substantial changes, including layoffs and policy shifts, have negatively impacted user satisfaction and advertising revenue.

    Despite the rivalry between Mark Zuckerberg and Elon Musk, the concept of a cage fight has been abandoned. Zuckerberg expressed scepticism about Musk’s seriousness, signalling a shift in focus.

    The declining user engagement raises questions about Threads’ long-term viability. While Meta has refrained from commenting on the app’s performance, the departure of prominent brands and the downward trend in engagement suggest a struggle for Threads to regain its initial momentum.

    Threads’ explosive entry into the social media landscape has been followed by a notable decline in daily usage. The challenges faced by Threads, combined with changes at Twitter, highlight the difficulty of disrupting the text-based social media sector. The fate of Threads as a contender in the industry remains uncertain.

  • High prices lead to 79% drop in new car sales in June 2023

    High prices lead to 79% drop in new car sales in June 2023

    The automobile industry of Pakistan experienced a severe blow in the fiscal year 2022-23, with car sales plummeting by 56 per cent to a mere 126,879 units, according to data shared by the Pakistan Automotive Manufacturers Association (PAMA) on Tuesday. This significant decline can be attributed to various factors, including the non-availability of completely knocked down kits (CKDs), exorbitant car prices, a surge in auto financing, and the reduced purchasing power of buyers.

    In June 2023, the monthly sales took a substantial hit, dropping by 79 per cent compared to the same period last year, reaching a meager 6,034 units. However, it is worth noting that the sales in June were 10 per cent higher when compared to the sales in May.

    Among the car manufacturers, Honda Atlas Car (HCAR) witnessed the most notable increase in sales, with a month-on-month surge of 253 per cent to 307 units in June. This growth can be attributed to the lower sales base in the previous month and the availability of necessary car parts.

    Pak Suzuki, on the other hand, experienced a modest month-on-month growth of 2 per cent in June, with sales reaching 3,009 units. The surge in Bolan sales by 67 per cent contributed to this increase. However, the company’s bookings took a significant hit, plunging by 57 per cent to 65,364 units in the fiscal year 2022-23.

    Indus Motor Company, responsible for assembling Toyota cars, observed a 7 per cent increase in bookings on a month-on-month basis, reaching 1,846 units in June. Nonetheless, the company’s total car sales for the fiscal year 2022-23 amounted to 31,104 units, reflecting a decline of 58 per cent year-on-year.

    Hyundai Nishat Motor witnessed an 11 per cent month-on-month increase in sales, with the sales of Tucson surging by 61 per cent to 313 units and Elantra sales increasing by 28 per cent to 88 units in June.

    Shifting focus to the tractor segment, Millat Tractors (MTL) experienced a 42 per cent month-on-month increase in bookings, reaching 2,136 units in June. Conversely, Al Ghazi Tractors (AGTL) recorded sales of 854 units, marking a decline of 57 per cent. Overall, the total tractor industry sales for the fiscal year 2022-23 amounted to 30,942 units, representing a decrease of 48 per cent due to factors such as floods, plant shutdowns, lower consumer buying power, and higher prices.

    Looking ahead, the high interest rates and the significant increase in auto prices resulting from the depreciation of the Pakistani rupee against the dollar are expected to continue negatively impacting auto sales in the fiscal year 2024. Furthermore, restrictions on opening letters of credit (LCs) for importing CKDs by auto assemblers may lead to lower plant capacity utilisation and, in extreme cases, plant shutdowns across the industry.

  • Gold price declines by Rs1,700 to Rs234,500 per tola amidst weakening rupee

    Gold price declines by Rs1,700 to Rs234,500 per tola amidst weakening rupee

    The price of gold in Pakistan continued its downward trend on Monday, having lost a cumulative sum of Rs1,100 per tola throughout the previous week. The All Pakistan Sarafa Gems and Jewellers Association (APSGJA) provided data indicating that the rate of 24-carat gold declined by Rs1,700 per tola and Rs1,457 per 10 grammes, reaching Rs234,500 and Rs201,046 respectively.

    On the international front, the price settled at $1,945 per ounce after a decrease of $1. The safe-haven bullion traded within a narrow range in the global market due to an agreement reached by US Democrats and Republicans to raise the federal debt ceiling, thereby averting a potential US default, which would have been unprecedented.

    Moreover, recent data suggested that the US Federal Reserve would raise interest rates for the 11th consecutive time in June. Consequently, the value of the US dollar surged, negatively impacting the gold price.

    These factors, coupled with ongoing political and economic uncertainty, high inflation, and currency depreciation, contributed to the volatility of the gold rate in Pakistan. As a result, individuals turned to purchasing the precious metal as a safe investment and a hedge.

    In the interbank market, the Pakistani rupee experienced a decrease of Re0.27 or 0.09 per cent against the US dollar on Monday, closing at Rs285.42, according to data from the State Bank of Pakistan.

    Furthermore, data shared by the jewellers’ association revealed a decline in the price of silver, which had remained relatively stable in the previous week. The rate of silver fell by Rs50 per tola and Rs42.87 per 10 grammes, reaching Rs2,850 and Rs2,443.41 respectively.

  • Pakistan’s forex reserves decline to $4.31 billion, covering less than a month’s worth of imports

    Pakistan’s forex reserves decline to $4.31 billion, covering less than a month’s worth of imports

    The State Bank of Pakistan (SBP) has experienced a continuous decline in foreign exchange reserves for the third consecutive week. This decline is attributed to the country’s ongoing struggle to secure a deal with the International Monetary Fund (IMF).

    The central bank’s statement indicates that the reserves decreased by $72 million to reach $4.31 billion as of May 12, primarily due to external debt payments. This amount is sufficient for less than a month’s worth of imports.

    In contrast, commercial banks in Pakistan hold net foreign reserves amounting to $5.62 billion, which is $1.01 billion higher than the central bank’s reserves. Therefore, the country’s total liquid foreign reserves amount to $9.93 billion.

    Pakistan’s economy is currently facing significant challenges, exacerbated by financial difficulties and the delay in reaching an agreement with the IMF. Such an agreement is crucial as it would provide much-needed funding to mitigate the risk of default.

    Earlier, on May 11, the State Bank of Pakistan (SBP) witnessed a decline of $74 million in foreign exchange reserves within a week, resulting in reserves amounting to $4.38 billion. Additionally, commercial banks held net foreign reserves of $5.6 billion.

    Reports indicate that the IMF remains skeptical and is urging Islamabad to take further actions to unlock the loan program, despite assurances from friendly countries regarding external funds for Pakistan.

    Pakistan has been asked to present a repayment plan for a $3.7 billion loan to the IMF in June and demonstrate stronger support from friendly nations to fulfill its commitments.

  • Mobile phone imports in Pakistan drop by nearly 70%

    Mobile phone imports in Pakistan drop by nearly 70%

    According to the Pakistan Bureau of Statistics (PBS), Pakistan’s import of mobile phones has decreased by 68.29 per cent during the first eight months of the current fiscal year (2022-23) compared to the same period last year.

    The value of mobile phones imported from July to February (2022-23) was US $447.855 million, whereas it was US $1412.445 million in the corresponding period of the previous year.

    In February 2023, the import of mobile phones decreased by 76.73 per cent compared to February 2022. The imports for February 2023 were valued at US $33.054 million, whereas the exports for February 2022 were US $142.033 million.

    Furthermore, the data shows that the import of mobile phones witnessed a month-on-month decline of 36.39 per cent during February 2023, as compared to January 2023, with imports valued at US $51.960 million.

  • Pakistan’s textile industry struggles as exports fall by 28% in February

    Pakistan’s textile industry struggles as exports fall by 28% in February

    On Monday, the All Pakistan Textile Mills Association (APTMA) released provisional data indicating that Pakistan’s textile sector exports declined significantly by 28 per cent, totaling $1.2 billion in February 2023, compared to $1.67 billion in the same month the previous year.

    Additionally, APTMA reported that textile exports for the first eight months of FY23 decreased by 11 per cent to $11.24 billion, down from $12.60 billion in 8MFY22. These declines are alarming for Pakistan, whose economy is already struggling with depleting foreign exchange reserves.

    The country’s central bank has only $3.81 billion in reserves, which is barely enough to cover a month of imports.

    Industrialists in Pakistan have expressed concern about the ongoing slump in the textile sector. Data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday revealed that cotton arrival in Pakistan also decreased by 34.5 per cent year-on-year.

    Last month, APTMA urged the federal government to implement a uniform gas price of $7 per MMBtu for the export industry throughout the country to ensure a level playing field.

    APTMA also warned that the government’s decision to suspend the regionally competitive energy tariff (RCET) of electricity for Export Oriented Units (EOUs) would harm the textile industry, particularly in Punjab.

    In December, APTMA wrote a letter to Prime Minister Shehbaz Sharif, warning that the country’s textile exports could fall below $1 billion a month from 2023 onwards, highlighting a range of issues affecting the sector, which is currently operating at less than 50 per cent capacity utilization.

  • Pakistan continues to face liquidity crunch despite IMF programme’s revival

    Pakistan continues to face liquidity crunch despite IMF programme’s revival

    Even though the International Monetary Fund (IMF) programme has resumed after a seven-month hiatus, Pakistan continues to struggle with a major dollar liquidity crunch as the catastrophic floods have exacerbated the macroeconomic conditions.

    According to Geo, since many politicians and economists advocated for Pakistan to ask the IMF for a Rapid Financing Instrument (RFI) or Natural Calamity Response-related Funding Facility, the Pakistani government has not yet submitted a new request in anticipation of the Washington-based international lender’s unenthusiastic response.

    After being put on hold in February 2022 by the previous PTI-led government’s provision of unfunded fuel and energy subsidies, the IMF project under $6.5 billion was restarted in late August.

    Since then, there has been pressure on Pakistan’s currency; nevertheless, the recent devastating floods have hurt the economy, contrary to what experts had anticipated would happen with the restart of the IMF programme.

    The rupee has dropped 9 per cent against the US dollar in recent days due to intense pressure on the currency rate.

    According to reports, the issue has gotten worse as demand for imports has multiplied and there are not enough dollars in the country. Pakistan’s macroeconomic risks are not going away without greater dollar inflows.

    The early estimates of damages have now increased to almost $18 billion as a result of the severe flooding, with Pakistan’s agriculture industry taking the biggest hit.

    The worst agricultural performance will put pressure on rising import demand for commodities, and if Pakistan cannot attract the appropriate levels of dollar inflows, food shortages may occur in the ongoing financial year.

    In contrast to the projected aim of 3.9 per cent for the current fiscal year 2022–2023, the agriculture growth could remain zero or perhaps turn negative.

  • Pakistani rupee continues to crash against US dollar, closes near Rs240

    Pakistani rupee continues to crash against US dollar, closes near Rs240

    The Pakistani rupee (PKR) continued to depreciate against the US dollar on Thursday, closing near Rs240, another record low in the inter-bank market as a result of pressure from import payments and the government’s alleged inability to intervene.

    The local currency fell by Rs3.92 (1.63 per cent) or more, or Rs239.94, against the dollar, according to the State Bank of Pakistan (SBP).

    Due to the most recent depreciation, the rupee has fallen more than 13 per cent overall over the last 10 trading sessions. As a result of pressure from ongoing political and economic unrest, the rupee had lost Rs3.09 (1.31 per cent) or more on Wednesday. Its closing value was Rs236.02.

    According to Business Recorder, which cited knowledgeable sources, Finance Minister Miftah Ismail stated on Wednesday that due to the agreement with the International Monetary Fund (IMF), government interventions in the foreign exchange (forex) market cannot be made to control the rate of the US dollar.

    He insisted that the demand for payments against the $7.5 billion import bill from last month is what is putting pressure on the foreign exchange market. He did, however, guarantee that the problem with the US dollar rate and the stress on foreign exchange reserves will be resolved, and that the exchange rate is anticipated to stabilise starting in August.

    In contrast, Pakistan reported a $2,275 million current account deficit (CAD) for the month of June 2022 as opposed to a $1,637 million deficit for the same month in the previous year. The currency is put under more stress as the current account deficit grows.

    The CAD increased by $14.6 billion in a single year, from $2.8 billion in FY21 to $17.4 billion in FY22.