Latest news with #Rs277
Business Recorder
22-04-2025
- Business
- Business Recorder
Fitch forecasts Pakistan rupee at 285 against US dollar by June, 295 by FY26 end
Fitch Ratings has projected that Pakistan will gradually devalue its currency to avert likely pressure on the current account as economic activity picks up in the country. Bloomberg reported that 'the ratings company sees the rupee falling to 285 against the dollar by the end of June and weakening further to 295 by the end of the next fiscal year in 2026,' according to Krisjanis Krustins, Director of Asia Pacific Sovereign Ratings at Fitch. 'Pakistan's central bank will allow the rupee to gradually weaken to manage pressures on the current account as the economy gains pace,' the global media outlet added. The local currency hit an all-time low of Rs 307.10 against the US dollar in the first week of September 2023, amid a surge in dollar smuggling from Pakistan to neighboring countries. The government's crackdown on illegal currency dealers helped the Pakistani rupee recover to around Rs277/USD in the first half of 2024. The domestic currency has cumulatively depreciated by 0.86%, or Rs 2.43/USD, during the first eight months of the current fiscal year 2024-25. It stood at Rs 280.77/USD on Tuesday, compared to Rs 278.34/USD on June 28, 2024, according to SBP data. Meanwhile, Pakistan's current account posted a significant surplus of $1.2 billion in March 2025, compared to a revised deficit of $97 million in the previous month, SBP reported last week. This brings the total current account surplus to $1.86 billion in the first nine months of the current fiscal year (9MFY25), in stark contrast to a deficit of $1.65 billion during the same period of the previous fiscal year. SBP Governor Jameel Ahmad stated last week that Pakistan's foreign exchange reserves have dropped by $2 billion over the past couple of months due to foreign debt repayments, bringing the total down to $10.6 billion. However, he anticipated that Pakistan would receive $4–5 billion from external sources by the end of June, including inflows from global financial institutions. In light of this, he revised the projection for SBP-held foreign exchange reserves to $14 billion by the end of June 2025, up from an earlier estimate of $13 billion. Imports rose to $5.7 billion in March, indicating a pickup in economic activity, he added. The governor also projected that the economy would grow by 3% in FY25, compared to 2.5% in FY24. The IMF Executive Board is expected to consider approving the second tranche of $1 billion under the Extended Fund Facility (EFF) for Pakistan by the end of April or early May 2025. The expected decision follows a staff-level agreement reached between the IMF and Pakistani authorities under the $7 billion EFF on March 25, 2025. The global financial institution has repeatedly recommended that Pakistan allow market forces to determine the rupee-dollar parity based on the supply and demand dynamics in the inter-bank market.
Express Tribune
29-03-2025
- Business
- Express Tribune
Gold hits peak as US tariff looms
Listen to article Due to the approaching April 2 deadline for tariffs set by the US president, gold experienced a record-breaking surge in both local and international markets on Friday. In Pakistan, the price of gold per tola rose to Rs323,380, marking a single-day increase of Rs2,380. Similarly, the price of 10-gram gold climbed to Rs277,246, higher by Rs2,041, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). In the international gold market, the price reached $3,074 per ounce (including a $20 premium), up $22 for the day. On Thursday, the price of gold per tola had already risen by Rs3,200, settling at Rs321,000. Interactive Commodities Director Adnan Agar stated that gold hit a historic high of $3,086 on Friday, while the lowest point of the day was $3,054, with the market currently standing at $3,072. He described the market as strong and volatile, with further fluctuations expected next week due to key global economic events. Two major factors influencing market sentiment are the upcoming US employment data and the April 2 tariff deadline set by US President Donald Trump. Agar noted that Trump was expected to follow through on his trade policies, which could provoke retaliatory actions from other countries, leading to further market uncertainty. "While a significant correction in gold prices is anticipated, the exact timing remains uncertain," he said. Globally, gold prices surged to a record high, as investors flocked to the safe-haven asset amid fears of a trade war triggered by Trump's latest tariffs. Spot gold climbed 0.9% to $3,082.39 an ounce after hitting its 18th record high this year at $3,086.70 earlier in the session. Bullion is up 2% this week and is on track for a fourth straight weekly gain. US gold futures added 0.9% to $3,088.90. Meanwhile, the Pakistani rupee saw a slight uptick against the US dollar, appreciating by 0.02% in the inter-bank market on Friday. By the end of the trading session, the currency closed at 280.16, marking a gain of six paisa against the greenback. A day earlier, it had settled at 280.22. Globally, the US dollar was on track for a stable week but faced a quarterly decline, as concerns over tariffs potentially slowing US economic growth weighed on yields, stocks and the currency. Meanwhile, the euro, trading just below $1.08, was set for its strongest quarterly gain in over a year, rising more than 4% since the beginning of 2025, driven by hopes of peace in Ukraine, a weaker dollar, and a surge in German benchmark yields. The Japanese yen showed slight gains and was poised for a quarterly increase of nearly 4%, trading at 151.19 per dollar, largely unaffected by Tokyo's persistent inflation.
Express Tribune
27-02-2025
- Business
- Express Tribune
Tax revenue from cigarettes to decrease Rs34b
Listen to article British American Tobacco (BAT) has urged the government to review its heavy taxes on smokeless products, including vapours, and to clamp down on the illicit trade of cigarettes that is expected to dent state revenue by Rs34 billion in this fiscal year. A delegation of BAT and its affiliate Pakistan Tobacco Company (PTC) met Finance Minister Muhammad Aurangzeb this week, said company officials on Wednesday. Last year, the government increased duties on vapours by 2,500%, which required at least 3,000% increase in prices to reach even breakeven point, said Asad Shah, a PTC executive. He said PTC had to withdraw from the market after the imposition of heavy duties and this allowed smuggled vapours to take over. PTC Managing Director Syed Ali Akbar said that the company raised the issue of heavy duties on smokeless products with the finance minister and he promised to look into it. The minister acknowledged the adverse implications of illicit cigarettes and agreed that there was a need to shift policies, said Shah. BAT is working to promote vaping and oral products as well as oral nicotine pouches to shift away from cigarettes. By 2035, BAT would earn more than half of its revenues from smokeless products, said Kingsley Wheaton, the company's Chief Corporate Officer. But he cautioned that the achievement of targets would hinge on policy support from governments and public health regulators. The company earned 17.5% of total revenue from smokeless products last year. BAT is working to reduce the health impact of tobacco business by switching to smokeless products, which have lower risks. However, the formal tobacco sector is suffering badly in Pakistan due to increase in duties and the fearless penetration of smuggled and local non-duty-paid cigarette brands. In the last budget, the government significantly increased taxes on tobacco, which instead of curbing smoking resulted in shifting smokers from tax-paid expensive brands to cheaper illicit brands. The share of illicit and untaxed cigarettes increased from 22% to 54%. Total estimated annual sales of cigarettes are around 79 billion sticks and estimates suggest that 46 billion sticks are sold in Pakistan without paying taxes. The 200% excise shock in 2023 considerably shrank the formal sector and as a result government revenue and the share of formal sector would go down in the current year, said Asad Shah. Last year, the government received Rs277 billion in revenue from regulated manufacturers, which was expected to decrease to Rs243 billion this year, he said. A revenue reduction of about Rs34 billion, or 12%, is projected. Likewise, the formal sector sold 36 billion sticks of cigarettes last year, which is projected to dip 8.3% to 33 billion sticks. He said that there was no reduction in the number of consumers, who shifted to cheaper smuggled brands. Nearly 79 billion cigarettes were sold in Pakistan, of which 46 billion were in the informal sector, said Shah. Even if there was no increase in excise duty in the next two years, the regulated sector's share would further shrink to 30 billion cigarettes and the government revenue would dip to Rs223 billion, he added. "We were hopeful that the track and trace system might improve the situation but the silver bullet did not work," said Shah. There was zero enforcement of the track and trace system at the point of sale and smuggled brands were openly sold even one kilometre away from the red zone, he added. Kingsley Wheaton said that in Pakistan about 45% of the adult population was smoking, a ratio that was around 5% in Sweden after the introduction of smokeless products. He said that the formal tobacco sector paid $900 million in taxes to Pakistan's government last year, which could be more than doubled by clamping down on the illicit trade of cigarettes. BAT claims that the share of illicit cigarettes is 54% of the total consumption. PTC on Wednesday launched its Omni platform in Pakistan to advance tobacco harm reduction campaigns. Omni is a pioneering global platform designed to drive awareness and informed discussions around tobacco harm reduction. This platform aligns with the BAT Group's business goal to build a smokeless world through science-backed innovations.
