Current Final

Category: Business

  • Pakistan’s credit rating maintained by Fitch at ‘CCC’ amidst financing challenges

    Pakistan’s credit rating maintained by Fitch at ‘CCC’ amidst financing challenges

    Fitch Ratings, a US-based credit rating agency, has maintained Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC,’ according to a statement released on Wednesday.

    The ‘CCC’ rating indicates significant external funding risks due to elevated medium-term financing requirements, notwithstanding some stabilisation and Pakistan’s commendable performance on its current standby arrangement (SBA) with the International Monetary Fund (IMF), as explained by Fitch.

    While anticipating scheduled elections in February and prompt negotiation for a subsequent IMF programme after the SBA concludes in March 2024, Fitch cautioned about potential delays and uncertainties regarding Pakistan’s ability to achieve this.

    Fitch emphasised the potential vulnerability of recent reforms and the prospect of renewed political volatility in the wake of the upcoming elections. Regarding the ongoing IMF programme, Fitch expressed confidence in the unproblematic approval of the recent staff-level agreement (SLA) by the IMF board.

    Fitch’s assessment highlighted the positive outcomes of the programme review, including sustained fiscal consolidation, energy price reforms despite public backlash, and strides towards adopting a more market-driven exchange rate regime.

    However, Fitch also pointed out risks associated with policy implementation, citing a historical pattern of parties across the political spectrum in Pakistan failing to implement or reversing reforms agreed upon with the IMF.

  • 24-karat gold price plunges by Rs1,800 per tola, reflecting global market trends

    24-karat gold price plunges by Rs1,800 per tola, reflecting global market trends

    On Tuesday, the price of gold experienced a further decline, with 24-karat gold witnessing a decrease of Rs1,800, settling at Rs213,600 per tola.  

    The Karachi Sarafa Association indicated that the closing rate for 10 grammes of 24-karat gold in today’s session was Rs183,128, reflecting a loss of Rs1,543.  

    Simultaneously, 10 grammes of 22-karat gold registered a decline to Rs167,867, down by Rs1,415. 

    Last week, gold investors in the domestic bullion market faced a significant setback when the price of 24-karat gold plummeted by Rs8,000 per tola.  

    This drop was attributed to a notable decrease in international prices and the strengthening of the local currency. 

    In contrast, the price of silver remained stable in the domestic market today, with 24-karat silver and 10 grammes of 24-karat silver closing at Rs2,600 and Rs2,229.08, respectively.  

    The downturn in the local market is linked to the ongoing decline in international prices. 

    The international spot gold market experienced a 1.04 per cent decrease this week, currently standing at $1,994.46.  

    This decline is influenced by the pressure stemming from a stronger dollar and increased US Treasury yields, marking the second consecutive session in which the commodity has traded in the red zone. 

    Market participants are eagerly anticipating the US consumer price report scheduled for 05:30 pm PST today.  

    This report could offer valuable insights into potential rate cuts ahead of the Federal Reserve’s statement and Chair Jerome Powell’s comments on Wednesday. 

    In the domestic market, gold prices are also susceptible to fluctuations in the local exchange rate.  

    Rupee remains stable against US dollar

    During yesterday’s interbank session, the Pakistani rupee (PKR) maintained stability, settling at PKR 283.9 per USD, representing a marginal depreciation of around 3 paisa against the US dollar compared to the previous session’s closing of PKR 283.87 per USD.  

    As gold is denominated in US dollars, a strengthening local unit contributes to a decrease in the value of PKR-denominated gold. 

  • Minister urges officials to use PBS monitoring app for ensuring price stability across provinces 

    Minister urges officials to use PBS monitoring app for ensuring price stability across provinces 

    In a bid to ensure consistent prices across provinces, Muhammad Sami Saeed, the Caretaker Minister for Planning, urged Deputy Commissioners and Assistant Commissioners on Tuesday to rigorously utilise the Decision Support System (DSS) app developed by the Pakistan Bureau of Statistics (PBS) for effective price monitoring. 

    According to a press release issued today, Muhammad Sami Saeed chaired a meeting of the National Price Monitoring Committee (NPMC) in Islamabad.  

    The gathering focused on essential aspects such as the prices and supply of essential commodities, the margin between wholesale and retail prices, and the availability of necessary items. 

    During the meeting, the Chief Statistician from PBS presented the price movements of 51 essential items collected from the markets in 17 cities.  

    Minister Saeed stressed the importance of maintaining price stability across provinces and urged participants to oversee the supply of essential items, available stock levels, and pricing mechanisms. 

    Highlighting the critical role of administrative oversight and monitoring, Minister Saeed emphasised the need for vigilance in ensuring price stability.  

    The meeting also explored the potential utilization of remote sensing technology provided by SUPARCO to enhance monitoring of cropped areas and predict the supply situation of essential food items in the provinces. 

    Encouraging the exploration and implementation of remote sensing capabilities, the minister aimed to strengthen monitoring and oversight capacities.  

    He underscored the importance of continued vigilance and proactive measures to address fluctuations in commodity prices and ensure a smooth supply chain. 

    Representatives from the Ministry of Industries and Commerce, utility stores, and provincial governments attended the meeting, signifying a collaborative effort to maintain stability in commodity prices. 

  • State Bank of Pakistan maintains policy rate at 22% despite inflation concerns 

    State Bank of Pakistan maintains policy rate at 22% despite inflation concerns 

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) convened today to deliberate on the prevailing economic conditions and has resolved to maintain the policy rate at 22 per cent for the fourth consecutive meeting. 

    This decision aligns with market expectations, as a majority of market participants were in agreement regarding the rate remaining unchanged. 

    The Monetary Policy Statement issued by the central bank indicates that the decision takes into consideration the impact of the recent increase in gas prices on November’s inflation, which exceeded the MPC’s earlier projections.  

    The Committee acknowledged the potential implications of this on the inflation outlook while also noting offsetting factors such as the recent decline in international oil prices and the improved availability of agricultural produce. 

    Additionally, the Committee conducted an assessment indicating that the real interest rate remains positive over a 12-month forward-looking horizon and anticipates a downward trajectory for inflation. 

    Key developments since the October meeting were considered by the MPC. Firstly, the successful completion of the staff-level agreement for the first review under the IMF SBA programme, which is expected to unlock financial inflows and enhance the SBP’s foreign exchange serves, 

    Secondly, the quarterly GDP growth for Q1–FY24 met the MPC’s expectations for a moderate economic recovery. 

    Lastly, consumer and business confidence surveys reflected positive sentiment improvements. Lastly, core inflation persists at elevated levels, showing a gradual reduction. 

    Considering these developments, the Committee determined that the existing monetary policy stance is conducive to achieving the inflation target of 5-7 per cent by the end of FY25. 

    The Committee emphasised that this assessment is contingent on the sustained implementation of targeted fiscal consolidation and the timely realisation of planned external inflows. 

  • PSX bounces back with gain of nearly 500 points

    PSX bounces back with gain of nearly 500 points

    The Pakistan Stock Exchange (PSX) welcomed a resurgence of bullish activity as the KSE-100 Index marked a substantial gain of nearly 500 points in Tuesday’s trading session.

    At 1:55 pm, the benchmark index stood at 66,496.21, reflecting a noteworthy increase of 483.89 points, or 0.73 per cent. 

    The positive momentum was evident in key sectors such as cement, fertiliser, oil and gas exploration, OMCs, refineries, and power generation. However, a mixed trend characterised the automobile and commercial bank sectors.

    In contrast to the previous session, where profit-taking led to a 211-point dip in the KSE-100 Index, today’s bullish trend is attributed to favourable economic indicators. 

    Investors are keenly observing the upcoming International Monetary Fund (IMF) executive board meeting on January 11, 2024.

    Simultaneously, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is convening today, with market expectations leaning towards a maintenance of the key interest rate—a rate that reached an unprecedented 22 per cent in June and has remained unchanged for the past three meetings.

    Analysts note that investors have factored in the pinnacle of Pakistan’s interest rates, and optimism surrounds the anticipated successful conclusion of the IMF programme, contributing to the positive sentiment in both the stock markets and the currency.

  • ECNEC approves multi-billion rupee initiatives for education, healthcare, and infrastructure 

    ECNEC approves multi-billion rupee initiatives for education, healthcare, and infrastructure 

    The Executive Committee of the National Economic Council (ECNEC) recently convened to review and approve nine projects valued at Rs371.85 billion across various sectors, as detailed in a press release from the Finance Division.   

    Among the sanctioned projects is the Khyber Pakhtunkhwa Food Security Support Project, with a budget of Rs25.098 billion, aimed at addressing climate vulnerabilities, enhancing food security, and improving livelihoods in flood-affected districts of KP province over a five-year period.  

    In Sindh, the ECNEC approved the “Sindh School Rehabilitation Project under Flood Restoration Programme,” valued at Rs86.081 billion, with the goal of rehabilitating 1607 schools in districts severely affected by rain/floods.   

    Another KP-focused initiative, the “Education Component: Refugees & Host Communities Regional Sub-Windows SH Khyber Pakhtunkhwa Human Capital Investment Project (KP-HCIP),” received approval at a cost of Rs32.835 billion, targeting the rehabilitation and reconstruction of 1165 damaged schools in 13 districts.  

    Additional projects approved include the “Prime Minister’s Laptop Scheme” (Rs16.801 billion), Khyber Pakhtunkhwa Human Capital Investment Project (Health Component) (Rs24.225 billion), Women Inclusive Finance (Rs31.413 billion), Thar Coal Railway Connectivity (Rs53.727 billion), Peshawar Northern Bypass Project (PNBP) (Rs27.052 billion), and the Greater Thal Canal Project (Phase-II), which was deferred for further consultation.  

    The ECNEC also granted permission for the Sindh Barrage Improvement Project (Phase-II), allocating Rs74.618 billion for the rehabilitation and modernization of Sukkur Barrage and remaining works for Guddu Barrage.   

    Chaired by Dr. Shamshad Akhtar, the caretaker Federal Minister for Finance, Revenue & Economic Affairs, the meeting involved discussions among government officials.   

    The approved projects cover diverse areas such as education, healthcare, infrastructure, and disaster recovery, reflecting a comprehensive approach to addressing various socio-economic challenges across provinces. 

  • Gold price in Pakistan drops to Rs215,400 per tola 

    Gold price in Pakistan drops to Rs215,400 per tola 

    The price of 24-karat gold per tola witnessed a decrease of Rs200, settling at Rs215,400 on Monday. This marked a decline from its previous closing at Rs215,600 on the last trading day.  

    Simultaneously, the cost of 10 grammes of 24-karat gold saw a reduction of Rs171, reaching Rs184,671 from its earlier value of Rs184,842.  

    In the case of 10 grammes of 22-karat gold, the price dropped to Rs169,282 from Rs169,439, as reported by the All Sindh Sarafa Jewellers Association. 

    The rates for silver, however, remained unchanged, with the per-tola and ten-gramme prices standing at Rs2,600 and Rs2,229.08, respectively.  

    Additionally, in the international market, the cost of gold experienced a $6 decrease, reaching $2,018 from $2,024, according to the Association. 

    Meanwhile, the recent trend of the Pakistani rupee’s appreciation against the US dollar came to a halt as the currency witnessed a marginal 0.01 per cent dip in the interbank market on Monday.  

    The State Bank of Pakistan (SBP) reported that the rupee settled at 283.90, reflecting a decrease of Re0.03. 

  • Pakistan expected to increase petroleum levy to get IMF loan 

    Pakistan expected to increase petroleum levy to get IMF loan 

    Pakistan has reportedly provided assurances to the International Monetary Fund (IMF) regarding an augmentation of the petroleum levy in the fiscal year 2024–25, aligning with its intentions to embark on a new loan programme. 

    According to documentation cited by sources within the finance ministry, Pakistan has committed to elevating the petroleum levy to Rs1,065 billion in FY2024–25, anticipating a revision of the current levy target from Rs869 billion to Rs918 billion.  

    The attainment of the revised target is contingent upon an uptick in the consumption of petroleum products. 

    The sources additionally revealed that the caretaker government would have implemented a Presidential Ordinance if adjustments were to be made to the current petroleum levy target. 

    Earlier revelations indicate that Pakistan is poised to secure another financial assistance package from the International Monetary Fund (IMF) subsequent to the conclusion of the existing standby agreement. 

    The caretaker government has initiated consultations in preparation for the forthcoming IMF programme. 

    Sources have indicated that talks between the government and the IMF for the new loan programme are likely to commence this month.  

    Finance ministry officials underscored the commitment of the elected government to advance the measures established by the caretaker government. 

  • Govt may cut petrol price by more than Rs10 per litre

    Govt may cut petrol price by more than Rs10 per litre

    The government is poised to provide significant relief by potentially reducing petrol and diesel prices by Rs13 and Rs15 per litre, respectively, in the upcoming fortnightly pricing update.

    This anticipated reduction is attributed to a noteworthy downturn in international petroleum and diesel prices over the past fortnight.

    The stability of the local currency at a weighted average of approximately PKR 284.33 per USD further contributes to this potential relief. 

    Current estimates as of December 2008 reveal a global decline in petrol and diesel prices by 5.44 per cent and 5.6 per cent, reaching $94.95 and $100.05 per barrel, respectively.

    As the next pricing update is still a week away, the future trajectory of these prices hinges on global market movements and exchange rate fluctuations. 

    Notably, in the preceding fortnight, the government maintained the petrol price at Rs281.34 while reducing the HSD price by Rs7 to Rs289.71 per litre.

  • iPhone 16 batteries to be primarily manufactured in India

    iPhone 16 batteries to be primarily manufactured in India

    In a strategic manoeuvre aimed at reducing its reliance on China, Apple has reportedly communicated a strong preference for manufacturing iPhone 16 batteries in India.

    As part of this initiative, an existing Indian battery supplier has been encouraged to scale up production, while Chinese suppliers, including Desay and Simplo Technology, have received directives to establish battery factories within India.

    Additionally, Japanese battery supplier TDK is gearing up for its own production facility in the country.

    This significant shift in strategy deviates from the original decision made by Steve Jobs to centralize most of Apple’s manufacturing operations in China, a move that was previously lauded as a key achievement by Tim Cook during his tenure as COO. 

    The change reflects a growing recognition of the strategic risks associated with being overly dependent on a single country, evident in events such as the COVID-19 pandemic and ongoing geopolitical tensions between the US and China.

    The multifaceted rationale behind this move includes concerns about the impact of global events on manufacturing capacity, the unpredictability of trade relations between major economies, and the reputational challenges posed by close associations with a country facing human rights criticisms.

    Apple’s decision aligns with a broader industry trend of diversifying manufacturing locations to mitigate risks associated with geopolitical and economic uncertainties.

    Notably, the company aims to prioritise Indian production for iPhone 16 batteries, with local government support evident in a Japanese supplier, TDK, establishing a significant facility in Manesar, Haryana.

    While this facility is expected to begin production in 2025, post-iPhone 16 release, it signifies a strategic commitment to bolstering the electronics manufacturing ecosystem in India.

    Apple’s move underlines the industry’s evolving approach to supply chain management in response to a dynamic global landscape.