Tag: Stability

  • PM Shehbaz urges IMF to release stalled funds, assures compliance with conditions

    PM Shehbaz urges IMF to release stalled funds, assures compliance with conditions

    On Thursday, Prime Minister (PM) Shehbaz Sharif had a meeting with Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), where he urged the lender to release the stalled funds for Pakistan. He assured the IMF of Pakistan’s compliance with all the conditions set by the lender.

    The meeting took place during the Summit for a New Global Financial Pact held in Paris, emphasising Pakistan’s commitment to fulfilling its promises.

    During the meeting, the two leaders discussed the ongoing programmes and cooperation between Pakistan and the IMF. The prime minister briefed Georgieva on Pakistan’s economic outlook, highlighting the government’s efforts for economic growth and stability.

    He emphasised that all the necessary actions for the 9th review under the Extended Fund Facility (EFF) had been completed, and Pakistan was fully dedicated to meeting its obligations as agreed with the IMF.

    The prime minister expressed his hope for the timely release of the funds allocated under the EFF, as it would contribute to Pakistan’s ongoing efforts in economic stabilisation and provide relief to the people.

    Georgieva shared the IMF’s perspective on the ongoing review process and acknowledged the meeting as an opportunity to assess the progress made in that context.

    It is crucial to note that Pakistan’s currency reserves are currently sufficient to cover only one month’s worth of imports. The country had expected $1.1 billion of the funds to be released in November, but the IMF has imposed certain conditions before making further disbursements.

    With only one IMF board review remaining before the end of the $6.5 billion EFF programme, Pakistan is expected to present a budget aligned with the programme objectives, restore proper functioning of the foreign exchange market, and bridge the $6 billion gap before the board review.

  • After five days of losses, British stocks holding firm

    After five days of losses, British stocks holding firm

    A day after economic slowdown fears dragged the major British stocks to their sixth straight session of losses, UK equities stabilised on Tuesday, with some positive momentum from financial sectors and some excellent earnings announcements.

    By 0712 GMT, the FTSE 100 had up 0.6 per cent, with shares in British bank HSBC up 2.6 per cent providing the biggest boost to the blue-chip index.

    Following volatile crude prices, oil majors BP Plc and Shell Plc climbed 1.5 per cent and 0.8 per cent, respectively.

    After finishing at its weakest level in more than three months on Monday, the domestically focused mid-cap FTSE 250 index gained 0.7 per cent. Paragon Banking increased by 4.7 per cent after raising its expectations for 2022 and indicating robust new lending growth.

    FirstGroup jumped 1.2 per cent when the transportation company reported a higher yearly profit and restarted dividend payments, as passenger numbers on its buses increased after COVID-19 limitations were relaxed.

    Crest Nicholson rose 6.1 per cent after projecting an adjusted profit before tax of between 135 and 140 million pounds for fiscal year 2022. In 2021, the housebuilder made an adjusted profit of 107.2 million pounds.

  • Dr Murtaza Syed assumes charge as the new Governor State Bank of Pakistan

    Dr Murtaza Syed assumes charge as the new Governor State Bank of Pakistan

    With effect from May 5, Dr Murtaza Syed, the senior-most Deputy Governor and a former Deputy Resident Representative of the International Monetary Fund (IMF), became the new acting Governor of the State Bank of Pakistan (SBP).

    Prior to this, the federal government named Dr Syed as the Deputy Governor of the SBP for three years on January 27, 2020.

    Dr Syed has taken up the position in light of Section 10(2) of the State Bank of Pakistan (SBP) Act 1956 (amended), and has therefore succeeded Dr Reza Baqir, whose term ended on May 4, according to the notification.

    He holds a Ph.D. in Economics from the University of Oxford’s Nuffield College and has more than 20 years of experience in macroeconomic research and policymaking, including 16 years at the IMF. He worked on IMF initiatives and monitoring of emerging markets and advanced economies such as the Eurozone, Japan, and Korea. Dr Syed also handled IMF training and technical support projects around the world, and between 2010 and 2014, he was the IMF’s Deputy Resident Representative in China.

    Dr Syed started his career as a Senior Policy Analyst at the Human Development Center in Islamabad, where he worked under former Finance Minister D. Mahbub ul Haq. Afterward, he worked for the Institute for Fiscal Studies (IFS), a London-based public policy think tank, where he did research on company investment and employment behaviour, as well as evaluating Latin American anti-poverty programmes.

    Read more: Pakistan’s foreign currency reserves down by $328 million

    Dr Syed has produced papers on a multitude of macroeconomic topics, including fiscal and monetary policy, financial stability, economic crises, investment, demographics, poverty, and inequality, in addition to teaching public policy at the universities of Cambridge and Oxford.

  • Pakistani rupee plunges by Rs1.05 against the US dollar

    Pakistani rupee plunges by Rs1.05 against the US dollar

    In today’s interbank session, the Pakistani rupee (PKR) fell by Rs1.05 versus the US dollar (USD), concluding at Rs186.97 per US Dollar, compared to Rs185.92 per USD on April 20.

    The rupee had a tumultuous market session, with an intraday high of Rs187.10 and a lowest of Rs186.25. This depreciation of PKR is attributed to the country’s expanding current account deficit and dwindling foreign exchange reserves. However, the country must pay a significant amount in the final quarter of FY22, putting additional strain on the local unit.

    Pakistan’s currency has lost Rs29.42 versus the US dollar since July 21. According to data published by Mettis Global, the rupee declined by Rs10.45 in CYTD, with the month-to-date (MTD) position showing a drop of 1.87 percent.

    PKR has shed 18.56 per cent versus the US dollar in the previous 52 weeks, with a low of 186.97 today and a peak of 152.27 on May 7, 2021.

    Furthermore, the local currency has lost 10.11 per cent versus the euro since its high on May 5, 2021. Since its high on May 7, 2021, it has declined 13.24 per cent against the pound.

    Read more: PKR continues losing streak against US dollar, sheds Rs1.48

    The PKR slid Rs2.4 against the pound sterling, completing the day at Rs244.4 per GBP, down from Rs241.97 per GBP the previous session. Similarly, the PKR lost three rupees against the euro, closing at Rs204.08 at the interbank today.

  • State Bank of Pakistan hikes interest rate to 12.25% in an emergency meeting

    State Bank of Pakistan hikes interest rate to 12.25% in an emergency meeting

    Following an emergency meeting, the State Bank of Pakistan (SBP) raised interest rates by 250 basis points, as mounting political uncertainty and rising worldwide oil prices threaten to drive the country into a full-fledged economic catastrophe.

    The key rate is now 12.25 per cent, as per the latest statement released by the central bank on Thursday. According to the report, this makes the real rate “mildly positive” and will assist maintain external and price stability.

    The judgment came a few hours before the Supreme Court was due to rule on the constitutionality of Prime Minister Imran Khan’s disputed move to dissolve parliament and hold new elections. Pakistan may find it difficult to persuade the International Monetary Fund (IMF) to grant a much-needed loan tranche due to the political limbo.

    At the recent briefing, SBP governor, Reza Baqir, said, “We thought it’s important to take decisive action”.  He added that the body does not intend to do anything else.

    The central bank claimed that intensified domestic political turmoil contributed to the rupee’s 5 per cent loss and caused a jump in local bond rates, as well as Pakistan’s Eurobond yields and Credit Default Swap (CDS) spreads. Oil prices are likely to remain elevated, and the Federal Reserve of the United States is expected to compress sooner than expected, according to the report.

    The PKR broke all records on Thursday, selling at more than Rs189 per dollar in intraday trading in the interbank market, continuing a slump that has witnessed its decline of more than 10 per cent since March 4.

    Read more: Pakistan to import 32.7 million barrels of oil to cover petroleum needs

    Pakistan’s political instability, in addition to money from the IMF, is causing delays in a planned $1 billion green bond offering. A refinancing from China is also expected; the repayment in recent weeks caused Pakistan’s foreign-exchange reserves to plummet to their lowest level since records began in 2010.

    In a meeting last month, SBP cautioned that it might convene earlier than planned to avoid a crisis. It revised its average inflation prediction for the fiscal year ending in June from 9 per cent to little more than 11 per cent.