Latest news with #ShankarTalreja


Arab News
11-07-2025
- Business
- Arab News
Pakistan to complete pilot project for digital currency rollout by June next year
KARACHI: Pakistan's central bank plans to complete a pilot project for a digital currency in the ongoing fiscal year, its spokesperson said on Friday, as the country takes cautious steps toward embracing blockchain-based payments while tightening oversight of its virtual asset economy. The pilot announcement follows the establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA) through a presidential ordinance earlier this week. The law empowers the authority to regulate the country's growing crypto market, crack down on money laundering and terror financing, and promote responsible innovation — a move analysts say could bring an estimated $25 billion in virtual assets into the tax net. 'We hope to complete the pilot within the current fiscal year [ending June 30, 2026],' Noor Ahmed of the State Bank of Pakistan (SBP) told Arab News when asked about the rollout timeline. 'Tech partner and other details will be announced in due course.' Shankar Talreja, head of research at Topline Securities, said it was too early to say who would use the digital currency, since a pilot was still being launched, though he said it could benefit most bank account holders. 'Since this would be backed up [by the] central bank, so existing digital payment users can use this for payments,' he said. 'The challenge would be if merchants accept this initially.' The South Asian nation had long remained under scrutiny for weak financial controls and was only removed from the Financial Action Task Force's (FATF) 'grey list' in 2022. The creation of PVARA is seen as part of Islamabad's broader effort to cautiously formalize the virtual asset space. 'The legality of digital assets has been a grey area in Pakistan in the recent past from a practical standpoint,' said Nayab Babar, the chief investment officer at the Prime Minister's Pakistan Startup Fund. 'Creation of the crypto council is an extremely important development which gives confidence to consumers and corporates alike, that there is a way forward to legally participate in this booming asset class without fear of losing money,' he added. Farrukh H. Khan, the chief financial officer at Jazz, Pakistan's largest digital operator and a unit of global telecom giant VEON, also welcomed the new regulatory measures. 'It is the right approach that we pilot it and cautiously move forward,' he said while pointing out the government's decision would help document Pakistan's 'very large' base of crypto investors. 'According to Binance, which is one of the largest [digital] trading platforms, about 15 million Pakistanis are registered on their platform,' he said. To integrate digital assets into the economy, the government earlier launched the Pakistan Crypto Council (PCC) in March and later appointed Binance founder Changpeng Zhao as a strategic adviser. The move has been welcomed by retail traders like Muhammad Huzaifa, who said the lack of legal cover had previously left crypto investors vulnerable. 'Sometimes few government institutions like the FIA [Federal Investigation Agency] freeze the bank accounts of traders,' said the 33-year-old. 'These laws will lend more freedom and space for traders as they can buy, sell and invest in crypto easily without any fear,' he added. Asked about his digital holdings, he said he was managing multiple accounts 'between $50,000 to $100,000.' Farhan Hassan, the chief digital officer at Easypaisa Digital Bank (eDB) with over 50 million users, praised the creation of PVARA as a key step toward safer adoption. 'Pakistan has long been poised for broader crypto and blockchain adoption, but it lacked the regulatory clarity to unlock its full potential,' he said. 'This landmark development sets the foundation for a secure, transparent and regulated framework to guide the growth of virtual assets in Pakistan.' Hassan added that eDB was 'uniquely positioned' to collaborate with regulators in piloting, testing, and scaling financial solutions aligned with both global standards and local needs. CHALLENGES Still, analysts caution that implementation could be challenging due to the government's institutional capacity. 'The regulators may lack technical capacity and real-time monitoring tools to fully oversee crypto markets,' said Muhammad Waqas Ghani, head of research at Karachi-based JS Global Capital. He maintained that Pakistan's stock market was a more regulated and secure investment option, offering greater protection against fraud and manipulation compared to the still-evolving crypto space. Pakistan may also require the International Monetary Fund's approval if it plans to subsidize electricity for future crypto mining and AI data centers. '[The IMF] staff reiterated the importance of maintaining a level playing field for all private sector participants and will continue to engage with the authorities on this as appropriate as plans develop further,' Mahir Binici, the IMF's resident representative in Pakistan, said this week. Talal Ahmad, an official from the office of State Minister on Blockchain and Crypto Bilal Bin Saqib, did not provide any details in response to Arab News queries. 'A lot of these questions don't have answers at the moment. Could you wait until we pass the regulation law [from parliament]?' he said. Asked who would be the first users of Pakistan's digital currency, SBP's Ahmed said the central bank would share such details at a later stage. Pakistan's push follows the example of countries like India, which launched a pilot e-rupee in 2022. The Reserve Bank of India initially allowed selected banks to use it for settling secondary-market transactions in government securities before extending it to the retail sector.


Arab News
09-07-2025
- Business
- Arab News
Gulf remittances drive record $38.3 billion inflow to Pakistan in FY25, surpassing IMF loan package
KARACHI: Pakistan received a record $38.3 billion in workers' remittances during the last fiscal year, reporting an increase of about $8 billion over a 12-month period that exceeds the country's ongoing International Monetary Fund (IMF) loan program, according to official data and analysts on Tuesday. The remittance surge from $30.25 billion in FY24 helped shore up the country's foreign reserves, prompting experts to says it is likely to push the current account into surplus for the first time in over a decade. The IMF Executive Board approved a $7 billion Extended Fund Facility (EFF) for Pakistan in April 2024, spanning 37 months, after acknowledging Islamabad's structural reforms and stabilizing macroeconomic indicators. The government described the bailout as critical to reviving an economy that had faced a prolonged financial crisis and balance-of-payments stress over the past two years. 'Remittances have actually rescued Pakistan beyond expectations. It was a significant jump of over $8 billion in annual remittances, which is more than the whole IMF program funding,' Shankar Talreja, head of research at Topline Securities Limited, told Arab News after the central bank released remittance figures for the last fiscal year. 'Thanks to the remittances, we will be able to record a current account surplus for the first time after 13 years of deficit and for only the second time in the last two decades,' he added. According to the State Bank of Pakistan, Saudi Arabia led all contributors during FY25, with remittances totaling $9.34 billion, followed by the United Arab Emirates at $7.83 billion, the United Kingdom at $5.99 billion and the United States at $3.72 billion. Remittances from Gulf Cooperation Council (GCC) countries excluding Saudi Arabia and the UAE totaled $3.71 billion, while EU countries contributed $3.53 billion. Commenting on the data, Mohammed Sohail, CEO of Topline Securities, wrote on social media: 'Record Remittances When Most Needed. In a year marked by economic challenges, overseas workers stepped up: Pakistan received a record USD 38.3 billion in remittances in FY25 — up 27 percent.' The fiscal year average stood at approximately $3.19 billion per month, well above the average of $2.52 billion in FY24.


Arab News
09-07-2025
- Business
- Arab News
Pakistan records $38.3 billion in remittances in FY25, with spike surpassing IMF loan package
KARACHI: Pakistan received a record $38.3 billion in workers' remittances during the last fiscal year, reporting an increase of about $8 billion over a 12-month period that exceeds the country's ongoing International Monetary Fund (IMF) loan program, according to official data and analysts on Tuesday. The remittance surge from $30.25 billion in FY24 helped shore up the country's foreign reserves, prompting experts to says it is likely to push the current account into surplus for the first time in over a decade. The IMF Executive Board approved a $7 billion Extended Fund Facility (EFF) for Pakistan in April 2024, spanning 37 months, after acknowledging Islamabad's structural reforms and stabilizing macroeconomic indicators. The government described the bailout as critical to reviving an economy that had faced a prolonged financial crisis and balance-of-payments stress over the past two years. 'Remittances have actually rescued Pakistan beyond expectations. It was a significant jump of over $8 billion in annual remittances, which is more than the whole IMF program funding,' Shankar Talreja, head of research at Topline Securities Limited, told Arab News after the central bank released remittance figures for the last fiscal year. 'Thanks to the remittances, we will be able to record a current account surplus for the first time after 13 years of deficit and for only the second time in the last two decades,' he added. According to the State Bank of Pakistan, Saudi Arabia led all contributors during FY25, with remittances totaling $9.34 billion, followed by the United Arab Emirates at $7.83 billion, the United Kingdom at $5.99 billion and the United States at $3.72 billion. Remittances from Gulf Cooperation Council (GCC) countries excluding Saudi Arabia and the UAE totaled $3.71 billion, while EU countries contributed $3.53 billion. Commenting on the data, Mohammed Sohail, CEO of Topline Securities, wrote on social media: 'Record Remittances When Most Needed. In a year marked by economic challenges, overseas workers stepped up: Pakistan received a record USD 38.3 billion in remittances in FY25 — up 27 percent.' The fiscal year average stood at approximately $3.19 billion per month, well above the average of $2.52 billion in FY24.


Arab News
07-07-2025
- Business
- Arab News
Pakistan stock market breaches 133,000 points barrier as investors turn to equities
KARACHI: The benchmark KSE-100 crossed the 133,000 points barrier during intra-day trading on Monday to hit a record high, according to data shared by the Pakistan Stock Exchange (PSX), with a financial analyst attributing the rally to investors shifting from fixed income funds toward equities, and the country's improving macroeconomic conditions. The benchmark KSE-100 index rose by 1,907.53 points or 1.45 percent to reach 133,856.59 points at 12:31 p.m. from the previous day's close of 131,949.06 points, according to the PSX website. Pakistan's state broadcaster said the stock market's upward trend reflects the business community's growing confidence in the government's economic policies. 'The top-most factor contributing to market rally is conversion of fixed income funds to equities,' Shankar Talreja, head of research at Karachi-based brokerage company Topline Securities, told Arab News. 'Stocks generating over nine percent of the dividend yield have contributed most to the index rally,' he continued, 'This is because this dividend yield matches the fixed income rate and any capital gain on these stocks would be cherry on the top.' He noted that the market has been responding to improving macroeconomic indicators, adding that the State Bank of Pakistan's reserves climbed to $14.5 billion at the end of June. 'The regional and geopolitical issues also subsided last month which has further given confidence to local investors,' Talreja added, referring to the Pakistan-India, Iran-Israel armed conflicts. 'We expect the index to touch 160,000 by June 2026.' The development comes after the PSX breached the 130,000 points barrier last week to close at an all-time high, with experts attributing the surge to low inflation and surging crude oil prices. Pakistan's stocks have surged as Islamabad moves to consolidate its financial recovery after years of economic turbulence. In recent years, the country has implemented tough structural reforms under International Monetary Fund loan programs aimed at reducing fiscal deficits and restoring investor confidence.


Arab News
26-06-2025
- Business
- Arab News
Pakistan's trade deficit with Gulf states widens to $12.4 billion amid free trade agreement talks
KARACHI: Pakistan's trade deficit with Gulf nations widened by 14 percent to $12.4 billion in the outgoing fiscal year through May, even as the country pushes for a free trade agreement (FTA) with the six-member Gulf Cooperation Council (GCC) to boost exports and market access, official statistics show. The trade gap stood at $10.9 billion during the same period last year, according to data from the State Bank of Pakistan (SBP). Pakistan's exports to the region grew to $5.08 billion — up 16 percent — while imports rose 14 percent to $17.5 billion. The GCC includes Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain. Shankar Talreja, director of research at Topline Securities, attributed the widening trade imbalance primarily to surging imports from the UAE, Pakistan's largest oil supplier in the bloc. 'Pakistan's imports from the UAE have increased by 32 percent in 11MFY25,' Talreja told Arab News from Karachi. 'This is a whopping increase of $1.5 billion.' Overall, imports from the UAE jumped 46 percent to $8.33 billion, while exports to the country totaled $3.96 billion. In contrast, imports from Saudi Arabia dropped 15 percent to $3.47 billion. The increase in oil imports comes as Pakistan, which heavily depends on petroleum products from the GCC, monitors global crude trends. Prices spiked by 13 percent to $77 per barrel after Israel attacked Iran on June 13, before easing by 6 percent on June 24 following a ceasefire announcement. 'Pakistan largely relies on petroleum products from the GCC region and overall petroleum import bill in FY26 is unlikely to increase as oil prices are currently 10 percent lower than the average oil price of July-May period,' Talreja noted. 'This lower oil price may offset volumetric increase, leaving overall petroleum import bill unchanged,' he added. Last year, Pakistan spent $17 billion on oil imports, more than twice the size of its most recent International Monetary Fund (IMF) loan package. The IMF has urged the government to ramp up exports to stabilize its fragile external account. To that end, Islamabad is pursuing bilateral and multilateral trade deals, including FTAs with the GCC, South Korea, Vietnam, East Africa and Central Asian states. While Commerce Ministry spokesperson Muhammad Ashraf did not respond to queries, another official confirmed the FTA was under negotiation. 'The FTA talks with the GCC nations are ongoing but I am not sure if they have finalized anything,' the ministry official said, requesting anonymity as he was not authorized to speak to the media. Pakistan's Economic Survey for FY2024-25 mentions both the Pakistan-GCC FTA and the Pakistan-UAE Comprehensive Economic Partnership Agreement as 'upcoming agreements.' However, Talreja expressed skepticism about the potential gains. 'Pakistan has never benefitted from FTAs, like in case of China our deficit with China has further increased,' he said. Islamabad's FTA with Beijing, signed in 2006, has consistently produced unfavorable trade outcomes. The bilateral trade deficit with China stands at $2.5 billion this fiscal year, according to SBP figures. 'In the case of the Middle East, I doubt that Pakistan will benefit as it's a very competitive market due to the global access the GCC has,' Talreja added. 'Islamabad could only benefit if it negotiated something extraordinary.' Prime Minister Shehbaz Sharif's government is also pushing to expand trade with the United States, Pakistan's top textile buyer, by negotiating reciprocal tariffs. Talks are expected to conclude next week. As part of these discussions under the Trade and Investment Framework Agreement, Islamabad is seeking greater access for mangoes, dates and beef in the US market. Pakistan's trade prospects in the European Union remain strong after its GSP+ status, granting zero-duty access on 66 percent of tariff lines, was renewed. A preferential trade agreement with the eight-member Organization for Economic Cooperation also came into force in January. Still, officials warn that the country's export profile remains vulnerable due to over-reliance on a handful of markets. 'The overall export trajectory signals Pakistan's reliance on a few core markets, highlighting the need for diversification and expanded global outreach to minimize exposure to external shocks,' the finance ministry said in its economic survey.