Current Final

Category: Business

  • Things will get more expensive amidst soaring petroleum prices: Finance Ministry

    Things will get more expensive amidst soaring petroleum prices: Finance Ministry

    Due to the persistent escalation in energy and petroleum prices, it is anticipated that inflation will maintain its elevated trajectory in the months ahead.

    In its latest monthly economic update, the Ministry of Finance has presented a forecast indicating that inflation is poised to remain at an elevated level during the upcoming months. The report projects inflation to fall within the range of 29 per cent to 31 per cent for the month of September 2023, primarily attributing this surge to the notable uptick in prices of petroleum products and electricity.

    Furthermore, the report identifies several contributing factors to this inflationary pressure, including the possibility of surging transportation costs, a dearth of essential services and commodities, and the depreciation of the dollar, which has had a mitigating effect on imported inflation.

    In response to these challenges, the finance ministry has implemented rigorous measures to combat illegal currency exchanges and stockpiling activities while actively working to stabilise the exchange rate.

    The report also highlights a global trend of decreasing food grain prices, albeit with notable exceptions such as rice and sugar, whose prices have surged due to the ongoing conflict between Russia and Ukraine.

  • Pakistani rupee set to become best performer against US dollar following record-low recovery

    Pakistani rupee set to become best performer against US dollar following record-low recovery

    In September, Pakistan’s rupee emerged as the global front-runner in currency performance, driven by the interim government’s vigorous measures to curb illicit US dollar trading.

    According to a comprehensive report by Bloomberg, the Pakistani rupee has experienced a remarkable surge of nearly 6 per cent during this month, a notable accomplishment given the downward trajectory of most other currencies like the Thai baht and South Korean won against the strengthening US dollar, fueled by expectations of prolonged high US interest rates.

    On Thursday, the rupee exhibited resilience by rising 0.1 per cent, reaching Rs287.95 per dollar after hitting a record low of approximately Rs307 earlier in the month.

    Khurram Schehzad, the Chief Executive Officer of Alpha Beta Core Solutions Pvt. Ltd., a financial consultancy located in Karachi, commented on the situation, highlighting the prevalence of leakages through informal channels such as hawala and hundi trade, which are common in South Asia.

    Schehzad noted, when the USD rate reverses, everyone from hoarders to exporters, who have been holding onto their export proceeds, starts offloading their dollars.

    The Bloomberg report underscores the Pakistani government’s intensified efforts to crack down on illegal dollar trading, which have significantly contributed to the rupee’s resurgence.

    In addition to these measures, the central bank has raised capital requirements for smaller exchange companies and mandated large banks to establish their exchange entities, aiming to enhance transparency and oversight in the retail foreign exchange market.

  • FIA cracks down on luxury car showrooms in Karachi over money laundering suspicions

    FIA cracks down on luxury car showrooms in Karachi over money laundering suspicions

    On Thursday, the Commercial Banking Circle team of the Federal Investigation Agency (FIA) executed a seizure of four high-end vehicles at a Karachi-based car showroom.

    The owner of the establishment was unable to furnish credible documentation regarding the vehicles’ importation, raising suspicions of their involvement in a trade-based money laundering operation.

    The FIA has embarked on a comprehensive inquiry into the proprietors of car showrooms in Karachi, honing in on trade-based money laundering—an illicit stratagem that exploits international trade transactions as a conduit for unlawful financial transfers.

    In a recent enforcement operation, the FIA confiscated a quartet of opulent automobiles, including a Land Cruiser and an Audi, from a showroom situated on Khalid bin Waleed Road. Despite repeated requests, the showroom owner failed to comply with the FIA’s summons.

    The agency has further dispatched notifications to the proprietors of thirteen other car showrooms in Karachi, intensifying its scrutiny of this matter.

    Earlier in the week, the FIA conducted a search at the residence of a businessman by the name of Aziz Seekha in Karachi. This operation yielded a substantial haul of both foreign and Pakistani currency, alongside prize bonds, underscoring the agency’s ongoing efforts to combat financial irregularities.

  • Inventory challenges lead Indus Motor Company to halt Toyota car production in Pakistan

    Inventory challenges lead Indus Motor Company to halt Toyota car production in Pakistan

    Indus Motor Company Limited, the firm responsible for the assembly of Toyota vehicles in Pakistan, has recently announced a temporary suspension of its production operations until October 9. This significant decision was formally communicated through a notice submitted to the Pakistan Stock Exchange (PSX).

    The rationale behind this temporary cessation of production is primarily linked to the company’s current vehicle inventory status. Indus Motor Company Limited has set the production plant’s closure period from September 28 through October 9 to address these concerns.

    This pause in production is the latest in a series of similar actions undertaken by the company. Previously, Indus Motor Company Limited had temporarily halted production from August 25 to September 6, attributing it to reduced demand and inventory challenges. Additionally, the company faced a production plant shutdown from July 21 to August 3, driven by complications in the importation of raw materials, logistical hurdles in clearing consignments, and disruptions in the supply chain from select international vendors.

    These issues collectively hampered the company’s supply chain, leading to insufficient inventory levels to sustain uninterrupted production. Furthermore, a similar production hiatus had occurred earlier, from June 26 to June 27, with the same underlying reasons.

  • Human trafficked beggars from Pakistan arrested in alarming numbers abroad

    Human trafficked beggars from Pakistan arrested in alarming numbers abroad

    The Senate Standing Committee on Overseas Pakistanis was briefed on a concerning issue whereby a significant number of beggars are being trafficked abroad. Zulfikar Haider, the Secretary of the Overseas Ministry, brought this matter to light during a Senate panel discussion centred on the migration of both skilled and unskilled labourers from Pakistan.

    Haider revealed that an alarming 90 percent of beggars apprehended in foreign countries happen to be Pakistani nationals. This predicament has led to a notable strain on foreign jails, with reports from the ambassadors of Iraq and Saudi Arabia attesting to the overcrowding of their detention facilities due to these arrests.

    During the course of the discussion, Secretary Haider also pointed out a troubling trend where Japan has emerged as a newfound destination for such beggars.

    According to ARY News, Senator Rana Mehmoodul Hasan highlighting the varying demands placed on Japan for skilled workers from different countries, including India, Nepal, and Pakistan, each sending a distinct number of individuals to meet these demands.

    Senator Hasan further raised the issue of unemployment among engineers in Pakistan, highlighting that a staggering 50,000 engineers in the country are currently without employment opportunities.

    In the context of the Middle East, the senator provided statistics, noting that approximately three million Pakistanis reside in Saudi Arabia, while another 1.5 million have sought employment in the UAE, with an additional 0.2 million in Qatar.

    It is imperative to underscore that beggar syndicates are also exploiting minors, subjecting them to harsh weather conditions for personal gain. These syndicates have devised new tactics to extract money from people, contributing to a distressing trend whereby the number of beggars has doubled within a mere three-year span, as per recent reports.

  • PIA to be privatised: assets, debt and staff to be transferred

    PIA to be privatised: assets, debt and staff to be transferred

    Pakistan International Airlines (PIA), which has been running at a loss, has unveiled its privatisation plan. Sources indicate that this plan encompasses not only the privatisation of PIA but also the power distribution companies and the revival of Pakistan Steel Mills.

    Furthermore, it has been reported that the process of appointing a financial advisor for PIA’s privatisation is underway. While PIA’s affiliated institution will remain unaffected by privatisation, plans have been solidified to address issues related to PIA’s debt and government guarantees.

    According to ARY News, the Privatisation Commission sources have disclosed that, under the current circumstances, Pakistan Steel Mills cannot be privatised. However, efforts will be made to enhance the mill’s production and capabilities to attract potential investors.

    It’s worth noting that the restructuring plan for the privatisation of Pakistan International Airlines (PIA) is progressing rapidly. The PIA administration has invited applications from legal and corporate firms for assistance in this restructuring plan. The Department of Contract Management has been instructed to forward these applications by October 6.

    The assets of PIA, including properties, debts, aircraft, and employees, will be transferred to the new company, presenting PIA as a debt-free organisation to potential investors.

  • Good news: the gain of the rupee continues, now at Rs288.75

    Good news: the gain of the rupee continues, now at Rs288.75

    The Pakistani rupee continued to exhibit strength against the US dollar, marking a 0.36 per cent gain in the inter-bank market on Wednesday. Remarkably, this marks the rupee’s 16th consecutive appreciation against the greenback.

    According to the State Bank of Pakistan (SBP), the rupee settled at Rs288.75, reflecting an increase of Rs1.05 in the inter-bank market. This follows a 0.37 per cent appreciation observed on Tuesday, settling at Rs289.80.

    Over the past days, the rupee has consistently followed an upward trajectory, showcasing a remarkable recovery of over 6 per cent since reaching a historic low of Rs307.1 against the US dollar in the inter-bank market on September 5.

    On the global stage, the US dollar maintained its robust position, trading near a 10-month high against major currencies on Wednesday. This situation is underpinned by the persistent elevation of Treasury yields, driven by expectations of sustained higher US interest rates. Concurrently, the yen faced challenges as it edged closer to a critical intervention threshold.

    Recent statements from Federal Reserve officials have hinted at the possibility of further interest rate hikes, despite the central bank’s decision to hold rates steady the previous week. This has led to an ascent in US Treasury yields to levels not seen in several years, as financial markets recalibrate their expectations regarding the potential peak of US rates and the likelihood of a prolonged period of tight monetary conditions.

    The US dollar index, a gauge of its strength, recently stood at 106.20, having reached a 10-month peak of 106.26 in the preceding session. Meanwhile, the euro remained subdued, hovering close to a six-month low and trading at approximately $1.0569.

  • Power company in Punjab wants to set power price at record-breaking high of Rs77.3 per unit

    Power company in Punjab wants to set power price at record-breaking high of Rs77.3 per unit

    In a noteworthy development that has captured significant attention and ignited considerable debate, the Kot Addu Power Company (KAPCO) has formally submitted an application to the National Electric Power Regulatory Authority (NEPRA) for the endorsement of what could potentially become the nation’s most costly electricity generation tariff. 

    This significant step has unfolded against the backdrop of ongoing deliberations concerning the escalating expenses associated with electricity production within Pakistan. 

    The Kot Addu Power Company has put forth a bold proposition, aiming to establish the electricity tariff at an unprecedented Rs77.31 per unit, attributing the primary rationale for this request to substantial hikes in production costs. 

    Notably, the present initial tariff offered by the independent power producer (IPP) company stands at a modest twenty-eight rupees per unit, underscoring the magnitude of the escalation should their proposal garner approval. 

    Adding a layer of complexity to this unfolding narrative, IPP Kot Addu Power, the entity responsible for electricity generation, has been granted a sixteen-month extension during the tenure of the Pakistan Tehreek-e-Insaf (PTI) administration.  

    However, this extension has not been without its share of controversy, with the Senate Power Committee recently deeming it unlawful, further intensifying the discourse surrounding this matter. 

  • New tax to be imposed on citizens soon

    New tax to be imposed on citizens soon

    The local government has unveiled a new tax that has drawn mixed reactions from citizens. 

    This latest tax, to be imposed in lieu of garbage collection, will be collected from households, shops, petrol pumps, and industrial units on a monthly basis.

    Starting from October, Multan and its neighboring areas will see this sanitation tax in effect. The tax rates are set at Rs50 for houses, Rs200 for shops, Rs1,000 for petrol pumps, and Rs2,000 for industrial unit owners on a monthly basis. 

    The government anticipates an annual revenue boost of approximately Rs4.28 billion through this tax initiative. However, the move has not been met with unanimous approval among citizens, many of whom have criticised it. 

    Meanwhile, amid ongoing discussions concerning the surging costs of electricity production in Pakistan, the Kot Addu Power Company has submitted an application to the National Electric Power Regulatory Authority (Nepra), seeking approval for what could potentially become the country’s most expensive electricity generation tariff.

    The proposal suggests an electricity tariff of Rs77.31 per unit, a significant increase from the current rate of twenty-eight rupees per unit. The power company attributes this substantial hike to rising production costs.

    Notably, the Kot Addu Power Company recently secured a sixteen-month extension during the Pakistan Tehreek-e-Insaf (PTI) administration. However, this extension has not escaped controversy, as the Senate Power Committee has declared it illegal, further fueling the debate over electricity tariffs in the country.

  • Afghani emerges as top-performing currency against US dollar 

    Afghani emerges as top-performing currency against US dollar 

    In the third quarter of 2023, the Afghani, the official currency of Afghanistan, has exhibited exceptional performance, marking itself as the standout currency in the global financial landscape. Its remarkable ascent against the US dollar, with a substantial 9 per cent surge since the commencement of July, stands as a testament to its resilience and strength. 

    This impressive trajectory positions the Afghani as the third-strongest performer among global currencies in 2023, trailing only behind the Colombian peso and the Sri Lankan rupee. This distinction underscores the Afghani’s resilience amid challenging economic circumstances. 

    In Afghanistan, the pivotal role of facilitating foreign currency transactions falls upon the numerous money exchange establishments known as “sarrafs.” These sarrafs are ubiquitous, dotting the landscapes of both urban centres and rural villages alike, serving as the lifeblood of currency exchange activities. 

    Among these financial hubs, the Sarai Shahzada market in Kabul takes centre stage as Afghanistan’s premier financial epicenter. It serves as a bustling hub where substantial sums of currency are traded daily, exemplifying the nation’s financial vitality. Remarkably, the central bank places no restrictions on these exchange transactions. 

    Due to stringent financial sanctions, a significant portion of funds flowing into Afghanistan from foreign nations now traverse through the age-old money transfer system known as Hawala. This venerable system plays a pivotal role in the operations of sarrafs, further cementing their significance in Afghanistan’s financial ecosystem. 

    It is noteworthy that the United Nations (UN) has identified Afghanistan’s dire need for approximately $3.2 billion in aid for the current year, with roughly $1.1 billion already disbursed. This underscores the critical importance of international assistance in alleviating the nation’s pressing humanitarian challenges. 

    A sombre backdrop to these financial dynamics is the fact that, just last year, the UN disbursed nearly $4 billion in aid as Afghanistan grappled with a dire famine that affected half of its 41 million citizens. This staggering statistic underscores the profound challenges faced by the Afghan population. 

    Since the Taliban’s resurgence in Kabul in August 2021, stringent currency controls have been imposed, disallowing the use of the US dollar and Pakistani rupee by locals and restricting online trading activities. While these measures have seemingly contributed to Afghanistan’s stability, the broader Afghan economy has suffered, with soaring unemployment rates exacerbating the nation’s humanitarian crisis. 

    Regrettably, a staggering 79 per cent of the population now languishes in poverty, with a distressing 44 per cent of the people unable to secure adequate nourishment. The plight of Afghanistan’s populace remains a pressing global concern, necessitating concerted efforts to address both immediate humanitarian needs and long-term economic stability.