Latest news with #Rs285
Express Tribune
01-06-2025
- Business
- Express Tribune
Banks delay import payments
The price of local currency has started increasing gradually in both open and interbank markets Listen to article Commercial banks have once again started delaying import-related payments due to the limited availability of foreign currency, caused by major foreign debt repayments due before the end of June and the need to meet the reserves-related condition set by the International Monetary Fund (IMF). The situation warrants that the central bank either completely stop purchasing foreign currency from the markets or drastically reduce it to improve the supply of dollars, according to background discussions with multiple bankers. The State Bank of Pakistan (SBP) on Saturday did not provide an official version on the matter. Banking and market sources told The Express Tribune that some major and small banks were delaying import-related payments by two to three weeks, particularly in cases of open-account and contractual imports. The banks were also providing dollars for the clearance of letters of credit (LCs) to some major importers at rates higher than the interbank rate, they added. Because of the situation, the spread between the interbank and open market has started widening, and a few banks have again been compelled to ration the provisioning of dollars. The interbank rate was over Rs282 to a dollar, while in the open market the dollar was available close to Rs285, said banking and currency market sources. The situation is not as bad as the 2022 crisis, and it is high time that the central bank took notice to avoid any speculation in the market, said a senior executive of a private bank whose institution was also facing the challenge of ensuring sufficient dollar provision for import payments. Concerned authorities said on condition of anonymity that the local currency did come under pressure in both open and interbank markets. However, they said that it was a temporary phenomenon and would end soon. Pakistan State Oil (PSO) and Pak Arab Refinery Limited (PARCO) were also facing issues in getting the right price of the dollar for making payments against their imports. The sources said that PSO paid about Rs3 higher for its latest import payment compared to the previous contract. This would translate into a higher petrol price for consumers. Pakistan is scheduled to make $2.4 billion in foreign commercial debt repayments to China next month, in addition to payments to some other multilateral lenders. The foreign exchange reserves stand at $11.5 billion, which is not enough to make these payments and at the same time retain reserves in double digits. The IMF has also further tightened the end-June Net International Reserves (NIR) target to negative $7.5 billiona further tightening of $1.1 billion compared to the target agreed upon in September last year. To meet these targets and foreign debt repayments, the central bank is still purchasing dollars from the market. The end-March negative NIR target was $10.2 billion, which means the central bank needs an additional $2.7 billion cushion just to meet the end-June target, according to the IMF report. Another senior executive at a bank said that export and remittance proceeds were sufficient to cover imports, but the challenge lay with the financial account, which was putting pressure on the exchange rate. He said the central bank should refrain from buying dollars for a few weeks to ease market conditions. Representatives of the banking industry have already brought the issue of the emerging shortage of foreign currency to the attention of the central bank, according to those privy to the discussions. Despite the IMF programme, Pakistan has not received enough foreign loans this time. Central Bank Governor Jameel Ahmad said a few months ago that the SBP had bought over $9 billion from the local market in 2024 to build reserves. The SBP spokesperson did not respond to questions about the reasons behind the recent pressure on the rupee-dollar parity, or whether there was a backlog of about $1 billion in deferred import-related payments due to the dollar shortage. He also did not respond to questions regarding the increasing spread between the interbank and open market rates or the strategy the central bank is adopting to address the situation. The buying of dollars from the market has helped reduce foreign debt by $800 million during the first nine months of this fiscal year. A stable rupee has also played a major role in bringing down the inflation rate to low single digits. However, exporters complain that tight control over the dollar price is eroding their competitive edge, and they argue that market forces should be allowed to play their role. There is also a seasonal increase in demand for foreign currency due to Hajj, which central bank authorities expect will now subside.
Express Tribune
25-05-2025
- Business
- Express Tribune
Greengrocers ignore official rates
Official prices of perishable food items across Lahore remained largely stable this week, but consumers saw little benefit due to widespread overcharging and profiteering by greengrocers, retailers and street vendors. Despite seasonal declines driven by peak harvest conditions and hot weather, shoppers continued to pay 50 to 100 per cent above official prices. For many residents, the failure to curb profiteering has become routine, with price lists issued by market committees often ignored and enforcement officials appearing disengaged from the daily struggles of the public. "What's the point of these official rates if no one follows them?" said Nadeem Qureshi, a father of three shopping in the Green Town Bazaar. "Vendors charge whatever they want, and no one checks them." Farzana Bibi, a homemaker from the Township area, shared. "Every week, I see prices go up on the same itemseven when the government says they've gone down. We're told there's a price control system, but we've yet to see it work." A review of official price lists and market surveys reveals stark contrasts. Live chicken was officially priced between Rs397 and Rs411 per kilogram, yet vendors sold it for Rs570 to Rs680, with boneless chicken reaching as high as Rs1,050 per kilogram. Despite official price control efforts, a wide range of essential vegetables and fruits continued to be sold at grossly inflated rates across Lahore's markets, burdening consumers with unchecked overpricing. From staples like potatoes, onions, and tomatoes to seasonal fruits such as mangoes, cherries, and apricots, the official rates served as little more than a formality. A-grade potatoes, fixed at Rs45 to Rs50, were routinely sold for up to Rs100 per kg, while onions listed at Rs30 to Rs35 fetched Rs80 in many places. Tomatoes, meant to cost Rs3035, were sold at nearly triple the price. Garlic and ginger, essential kitchen ingredients, saw massive discrepancies, with official prices being consistently ignoredChinese garlic, for instance, was listed at Rs285300 but sold at Rs500, and ginger retailed for up to Rs1,000 against its listed Rs610640. Similar patterns were observed in other vegetables. Bitter gourd, spinach, zucchini, and cucumbers, despite price reductions or stability, were sold far above government-fixed rates. Brinjal, priced officially at Rs6670, reached Rs140, and ladyfinger, listed at Rs124130, was sold at nearly Rs180. Even lemons, after a Rs70 drop in official price, cost up to Rs600 per kilogram in the markets. Cauliflower and cabbage were among the worst examples, sold at over four times their official rates. Fruits showed no relief either. Apples priced at Rs230390 were sold as high as Rs800, while bananas of all grades saw increases of Rs80130 over official rates. Dates were listed at Rs430460 but sold for as high as Rs800-2,000 per kilogram. Melons, watermelons, peaches, and phalsa all saw similar surges, with consumers paying far beyond government-fixed prices. This blatant disregard for official pricing mechanisms has rendered the price control system ineffective. Despite daily updates and official campaigns, vendors openly flout regulations with impunity, exploiting both high demand and lax enforcement.
Express Tribune
22-04-2025
- Business
- Express Tribune
Fitch projects rupee to fall to Rs295 by mid-2026
Listen to article Fitch Ratings has projected a gradual depreciation of the Pakistani rupee in the coming months as the country's economic activity picks up, potentially adding pressure on the current account. According to a Bloomberg report, Fitch expects the rupee to slide to Rs285 against the US dollar by June 2025 and further to Rs295 by the end of Pakistan's next fiscal year in June 2026. This would translate to a 1.5% depreciation from the current interbank rate of Rs280.76 and a 5% overall decline over the next 14 months. The forecast reflects Fitch's view that the State Bank of Pakistan will allow the rupee to weaken gradually to mitigate current account pressures as the economy gains momentum. This comes as Pakistan posted a record $1.2 billion current account surplus in March 2025, a major turnaround from a $97 million deficit in February. The rupee has depreciated by 0.86% — or Rs2.43/USD — during the first eight months of FY24-25, according to State Bank of Pakistan data. The local currency was trading at Rs280.77/USD on Tuesday, down from Rs278.34/USD on June 28, 2024. The rupee had previously plunged to a historic low of Rs307.10/USD in September 2023 amid rampant dollar smuggling. A government crackdown on illegal currency trading helped the currency recover to around Rs277/USD in early 2024.
Express Tribune
13-02-2025
- Business
- Express Tribune
Income tax surges Rs100b in 7 months
Listen to article ISLAMABAD: The salaried class's income tax payments have jumped to Rs285 billion in seven monthsRs100 billion more than the comparable periodas Minister of State for Finance Ali Pervaiz Malik hints at reducing the burden in the budget. Also, nearly Rs100 billion more in income tax that the salaried people were forced to pay from July through January was Rs25 billion more than the government's estimates for the full fiscal year. "The tax burden on the salaried class is more than its capacity to pay, and some of it will be shifted to other sectors in the budget," said Ali Malik while speaking at a seminar on Navigating Ease of Doing Business in Pakistan. The Minister of State said that despite the reluctance of Prime Minister Shehbaz Sharif, Rs75 billion in additional burden had to be passed on to the salaried class in the last budget for the sake of the International Monetary Fund (IMF) programme. However, during the JulyJanuary period of this fiscal year, the salaried class paid close to Rs285 billion in income tax compared to a little over Rs185 billion paid in the same seven months of the last fiscal year. In just seven months, the salaried class paid Rs100 billion, or 53%, more in the midst of a high cost of living with no social benefits in return. In the last fiscal year, the salaried class paid Rs368 billion in taxes. The state minister on finance said that the PM had reluctantly accepted putting Rs75 billion in additional burdena figure that has already been surpassed with five months still left until the close of the fiscal year. The details showed that non-corporate sector employees paid Rs122 billion this yearhigher by Rs36 billion or 41%. The corporate sector employees paid Rs86 billion in income taxhigher by Rs28.6 billion or 50%. The provincial governments' employees paid Rs48 billionRs23 billion or 96% more. The federal government employees paid Rs29 billionRs11 billion or 63% more. The government has failed to get due taxes from wholesalers and traders. The at-source tax deductions from non-registered traders are shown as the criterion for success. The National Assembly on Tuesday delayed approval of a bill to ban economic transactions by ineligible persons to support the real estate sector. While speaking at the seminar organised by CORE and the Baby Food and Nutrition Council, Malik admitted that high taxation on the beverage industry was also resulting in an increase in the size of informal production. The organisers displayed smuggled and locally produced unregistered children's nutrition products that were two times cheaper than those produced by registered businesses. These products were also posing health risks, while the provincial food authorities and the Competition Commission of Pakistan (CCP) remained inactive. "Below-quality infant formula products are a ticking bomb, and it's time that regulatory agencies wake up," said Dr Usman Bhatty, a representative of the Baby Food and Nutrition Council. "Food and nutrition goods are smuggled from Iran, and we can't do much about it," said Asif Khan, Director of the Balochistan Food Authority. SIFC expands Jameel Qureshi, the Secretary to the Special Investment Facilitation Council (SIFC), also spoke about his organisation's role in attracting investment and removing barriers to business. Qureshi said that the council was also working to make the Pakistan Sovereign Wealth Fund operational. The Pakistan Democratic Movement (PDM) government had enacted the Pakistan Sovereign Wealth Fund Act in 2023 to transfer shares of seven profitable entities and then sell them overseas to raise money. These entities include Oil and Gas Development Company, Pakistan Petroleum Limited, Mari Petroleum, National Bank of Pakistan, Pakistan Development Fund, Government Holdings (Private) Limited, and Neelum-Jhelum Hydropower Company. The IMF has raised objections to the governance structure and the legal mandate of the sovereign fund to directly sell state assets to foreign nations without a competitive process. The Wealth Fund is dormant after the IMF objected to its law and proposed sweeping amendments. The finance ministry had agreed in writing with the IMF that by December 2024, it would amend the Act. However, it has not amended the law. The legal amendments could not be introduced due to differences between the IMF and the finance ministry over the mode of those changes. The government saw no need to bring legal amendments for the governance structure, which could be done through rules and regulations. Qureshi said that the SIFC was working on reducing electricity prices, optimising the use of Special Economic Zones (SEZs), and preparing feasibility studies for 100 bankable projects. "Bureaucracy doesn't properly guide investors, and this is where SIFC comes in," said the secretary. The SIFC was working on eight areas that are imperative for long-term growth. Qureshi said there is a need to transition to an export-led growth model and implement a long-term economic roadmap. The secretary said that prompt decision-making was also needed and that for sustainable growth, there is a need to separate good foreign investment from bad investment. He said that the SIFC was working to increase domestic production, address tax-related matters, and strengthen dispute resolution mechanisms. Qureshi said that the chief justice of pakistan would this month name the Investment Ombudsman for dispute settlement. He said that a reduction in energy prices and interest rates was also imperative for long-term economic growth.
