Tag: economic developments

  • SBP reports second consecutive weekly decline in forex reserves

    SBP reports second consecutive weekly decline in forex reserves

    During the week ending on November 17, 2023, the State Bank of Pakistan (SBP) experienced a decline of $217 million in its foreign exchange reserves, settling at $7,180.0 million, as revealed by data released on Thursday.

    The total liquid foreign reserves for the country amounted to $12.3 billion, with commercial banks holding net foreign reserves of $5.1 billion.

    The central bank attributed this reduction in reserves to debt repayments. In a statement, the SBP explained, “During the week ended on November 17, 2023, the SBP’s reserves decreased by US$ 217 million to US$ 7,180.0 million due to debt repayments.”

    This marks the second consecutive week of a decline in the dollar stockpile, following a $115 million decrease in the previous week.

    It’s noteworthy that in July of this year, the central bank’s reserves received a significant boost as Pakistan received the initial tranche of approximately $1.2 billion from the International Monetary Fund (IMF).

    This followed the approval of a new $3 billion stand-by arrangement (SBA). Additional inflows were received from Saudi Arabia and the UAE.

    However, the SBP’s reserves have been facing pressures due to ongoing debt repayments, increased import payments following the relaxation of restrictions, and a lack of fresh inflows.

    In a positive development, the IMF announced last week that its staff and Pakistani authorities had reached an agreement on the first review of the SBA.
    The staff-level agreement is pending approval by the IMF Executive Board.

    The IMF stated, “The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilisation programme supported by the IMF’s US$3 billion (SDR2,250 million) SBA.”

    Upon approval, approximately US$700 million (SDR 528 million) will become available, bringing the total disbursements under the programme to nearly US$1.9 billion.

    Caretaker Finance Minister Dr Shamshad Akhtar, speaking to the media after the SLA with the IMF, expressed confidence that external financing would not be an issue, anticipating increased inflows in December 2023, which would contribute to boosting the foreign exchange reserves.

  • Toyota car prices reduced by up to Rs1.3 million in Pakistan

    Toyota car prices reduced by up to Rs1.3 million in Pakistan

    Indus Motor Company, the leading assembler of Toyota-brand vehicles in Pakistan, has made a significant move to benefit its customers. 

    In a recent announcement sent to its dealers on Tuesday, the company revealed a substantial reduction in car prices, effective October 24. This decision was prompted by the recent strengthening of the Pakistani rupee against the US dollar.

    Following this development, the basic Yaris model 1.3MT LO is now more affordable, with a price decrease of Rs100,000, or 2.2 per cent, bringing its new price to Rs4.399 million. 

    Similarly, the top variant, 1.5 CVT Aero, will now be available at Rs5.849 million after a reduction of Rs120,000. 

    The Toyota Corolla’s variant prices have been reduced between Rs200,000 and Rs250,000. Furthermore, Toyota’s pickup Revotrucks are now more budget-friendly, with price reductions ranging from Rs450,000 to Rs790,000.

    One of the most notable changes is seen in the Fortuner G4x2 Petrol STD, which will now be priced at Rs14.499 million after a substantial reduction of Rs1.31 million, or 8.3 per cent.

    This price adjustment follows the footsteps of other major players in the industry, including MG Motors and Lucky Motor Corporation (LMC), both of which have also announced price reductions for their vehicles.

    The automobile sector in Pakistan has faced challenges recently, mainly due to fluctuating exchange rates and restrictions on imports. 

    The rupee experienced a significant depreciation against the dollar, reaching a record low of Rs307.1 on September 5. 

    However, it has since recovered, stabilising around the Rs279–280 level. This positive trend aligns with the efforts of the caretaker government, which took measures against smugglers and hoarders, contributing to the currency’s recovery.

    Apart from currency fluctuations, the auto sector was affected by previous government policies, including import restrictions aimed at preserving foreign exchange reserves. 

    Additionally, higher finance costs and a considerable rise in car prices led to a decrease in consumer demand. In the first quarter of FY24, car sales in Pakistan plummeted to 20,983 units, marking a 40 per cent decline compared to the same period the previous year.

    Here are the latest prices of all Toyota cars in Pakistan:

    Car Model Variant Old Price (Rs.) New Price (Rs.) Price Reduction (Rs.)
    Yaris 1.3 MT LO 4,499,000 4,399,000 100,000
      1.3 CVT LO 4,789,000 4,689,000 100,000
      1.3 MT Hi 4,759,000 4,659,000 100,000
      1.3 CVT Hi 4,999,000 4,899,000 100,000
      1.3 CVT Aero 5,199,000 5,099,000 100,000
      1.5 MT 5,429,000 5,309,000 120,000
      1.5 CVT 5,769,000 5,649,000 120,000
      1.5 CVT Aero 5,969,000 5,849,000 120,000
    Corolla 1.6 MT 6,169,000 5,969,000 200,000
      1.6 CVT 6,769,000 6,559,000 210,000
      1.6 CVT SR 7,429,000 7,189,000 240,000
      1.8 CVT 7,119,000 6,889,000 230,000
      1.8 CVT SR 7,759,000 7,509,000 250,000
      1.8 CVT SR BLK 7,799,000 7,549,000 250,000
    Hilux Revo E 11,439,000 11,039,000 400,000
      G 12,409,000 11,959,000 450,000
      G 13,019,000 12,549,000 470,000
      V AT 2.8 14,389,000 13,849,000 540,000
      V AT Rocco 15,179,000 14,419,000 760,000
      GR S 16,149,000 15,359,000 790,000
    Fortuner 2.7 G Petrol 15,809,000 14,499,000 1,310,000
      2.7 V Petrol 18,099,000 16,999,000 1,100,000
      2.8 Sigma 5 Diesel 19,079,000 17,999,000 1,080,000
      Legender Diesel 20,129,000 18,999,000 1,130,000
      GRS 21,089,000 19,899,000 1,190,000
  • Saudi Aramco considers investing in Shell’s $200 million Pakistani assets

    Saudi Aramco considers investing in Shell’s $200 million Pakistani assets

    Saudi Aramco is actively contemplating the possibility of acquiring Shell’s holdings in Pakistan, marking a potential historic foray into the South Asian nation, according to Bloomberg.

    The Saudi oil company is evaluating Shell’s assets in the region, notably Shell Pakistan Ltd., a Karachi-listed entity with a market value of $123 million. The collective value of Shell’s Pakistani assets is estimated to hover around $200 million, according to insiders.

    Shell boasts a rich legacy of over seven decades in Pakistan, with a network of more than 600 fuel stations. The company has not only been a prominent fuel supplier but has also been engaged in the lubricant business.

    It’s crucial to note that this expression of interest from Saudi Aramco doesn’t guarantee an outright acquisition. Other potential suitors might emerge on the horizon.

    Responding to inquiries, a Shell representative acknowledged strong interest from both local and international buyers but refrained from divulging specific details. The representative emphasised that any sale would follow a structured sales process, including the execution of binding agreements and the requisite regulatory approvals.

    In a significant announcement made in June, Shell disclosed its intention to exit the Pakistani market, with plans to divest its 77.4 per cent stake in Shell Pakistan and its 26 per cent ownership in Pak-Arab Pipeline Co., a state-supported cross-country pipeline network. This strategic move aligns with Shell’s broader divestment strategy, led by CEO Wael Sawan, aimed at enhancing shareholder returns by shedding underperforming assets.

    Shell’s withdrawal represents a challenge for Pakistan, which is grappling with economic instability, exemplified by a depreciating currency over the past year. Pakistan has witnessed the departure of several multinational corporations in recent years, including fuel retailer Puma Energy in 2021 and the shutdown of trucking startup Trella in April.

    Meanwhile, Saudi Arabia, under the guidance of Crown Prince Mohammed bin Salman, has expressed a commitment to bolster its involvement and investments in Pakistan. The Saudi Fund for Development is exploring the possibility of increasing its deposit with the State Bank of Pakistan from $3 billion to $5 billion, as well as a plan to elevate Saudi investments in Pakistan to $10 billion.

    Furthermore, Aramco has entered into discussions with the Pakistani government regarding a substantial $10 billion refinery project, as confirmed by the country’s energy minister, Muhammad Ali, earlier this month. These developments reflect the growing engagement and economic ties between Saudi Arabia and Pakistan.