Remittances up by 7pc

LAHORE: Overseas Pakistanis remitted $2637.27 million in first two months (July & August) of the current fiscal year.

It shows a growth of 7.05 percent as compared to $2463.69 million received during the same period of last fiscal year, said a statement by State Bank of Pakistan.

The inflow of remittances in July-August from Saudi Arabia, UAE, USA, UK, GCC countries including Bahrain, Kuwait, Qatar and Oman and EU countries amounted to $732.50 million, $506.78 million, $448.60 million, $419.74 million, $295.59 million and $74.97 million respectively as compared to the inflow of $657.78 million, $505.80 million, $446.61 million, $334.06 million, $274.09 million and $63.57 million respectively in July-August FY12-13.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first two months of current fiscal year amounted to $159.09 million against $ 181.78 million received in the first two months of last fiscal year.

In August 2013, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman), and EU countries amounted to $321.77 million, $254.37 million, $215.54 million, $197.81 million, $134.15 million and $36.38 million respectively as compared to the inflow of $308.12 million, $265.26 million, $231.31 million, $185.57 million, $133.73 million and $32.74 million respectively in August 2012. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the second month of the current fiscal year (August FY14) amounted to $72.86 million, the SBP statement said.

Forex reserves slip below $10b

LAHORE: Foreign exchange reserves of Pakistan have dropped below $10 billion to $ 9,998.3 million.

Foreign exchange reserves held by the State Bank of Pakistan fell to $4,822.9 million while net foreign reserves held by banks stood at $5,175.4 million.

The IMF has approved $6.64 billion bailout package for Pakistan for three years that would strengthen the reserves. The Fund would provide $544 million loan’s first tranche to Pakistan in next few days while remaining amount would be disbursed in equal quarter transactions after the review of economic performance.

Expected hike in discount rate to attract high yields in T-Bills

LAHORE: State Bank of Pakistan (SBP) is likely to hike discount rate in the coming policy announcement due on next week for next two months as it has been showed by rising inflation trend in the country which may benefit high realised amount of T-Bills in the subsequent auction.

Market participants are expecting higher cut-off yields in T-bill auction as yield of 3-month T-Bill in secondary market levelled as high as 9% after the announcement of consumer price index (CPI) for Jul-13 of 8.26% year over year (YoY) compared to 5.85% YoY in June 2013.

The inflation has seen a rising trend on a yearly basis as most of the commodity prices shot up on the back of upward revision in GST coupled with other government taxes. Other factors that contributed to the inflation hike include increasing petroleum prices due to rising trend in international oil prices over Syrian crises, 5% depreciation of Rupee against Dollar in two months, and increased power tariff by the government to minimise circular debt issue in the country.

The central bank, being unwilling to increase cut-off yield significantly, received the realised amount remained far below the targeted amount. During last four T-bill auctions, the total realised amount was Rs699 billion against target of Rs1,100 billion with no significant change in cut-off yields.

The participation in short term T-Bill (3-month) to be higher as compared to other maturities (6 and 12 months). However, certain increase in cut-off yields can’t be rolled out as minimal increase in three months T-Bill cut-off yields is being expected with major participation in the same.

However, participation in other tenors ( 6 and 12 months) is expected to remain at a lower side though the central bank needs to attract banks and investors to meet its borrowing target of Rs1,600 billion for government’s borrowing needs to support fiscal deficit.

The SBP will likely to rely on T-Bill auctions or fulfil the same from its own resources through Open Market Operations. The T-Bills auction will likely to be made through floating government papers in the stock exchange as per proposal of Ministry of Finance for generating funds for its purposes.

Analysts said that hike in interest rate would definitely improve the yields of T-Bills for long-term and short-term tenors but it will also benefit the government to realise handsome amount whereas the banks may improve their profitability with T-Bills and rise in discount rates.

Rupee at record low against dollar

The dollar traded higher on the interbank market than the open market in three trading sessions last week, but the rupee fell below Rs104-mark against the dollar in the interbank market.

The rupee started the week with a three-paisa decline against the dollar on the buying counter and another four-paisa loss on the selling counter, pushing the US dollar up to Rs103.68 and Rs103.72 in the first trading session as it was Rs103.65 and Rs103.68 at the previous week’s close.

The rupee further drifted lower by 15-paisa on the buying counter and 13-paisa on the selling counter against the dollar, which closed the second trading session at Rs103.83 and Rs103.85. The open market’s rates for the dollar in the second session were Rs103.80 and 104.00.

The rupee continued its down-slide against the greenback in the third trading session, as it shed 17-paisa against the dollar, which climbed to a record Rs104.00 and Rs104.02. The open market’s corresponding rates for the dollar on the day were Rs103.90 and 104.10.

The dollar continued to gain in the fourth trading session in the interbank market, as it broke the previous day’s record to hit Rs104.50 and Rs104.52 against the rupee, up 50-paisa on the day. In this session, both buying and selling rates for the dollar were lower in the open market, at Rs104.30 and 104.50

The rupee shed another four-paisa on the buying counter and five-paisa on the selling counter against the dollar in the fifth trading session, which closed the week at Rs104.54 and Rs104.57 in the interbank market. The rupee depreciated by a cumulative 89-paisa against the dollar in the interbank market last week, compared with a loss of 60-paisa in the open market.

Rupee slides slightly against dollar


LAHORE: The traders and finance experts were expecting that with the setting up of new government, local currency rupee slide down trend would not only stop but after taking bold steps by incumbent government for the revival of country’s economy, rupee would be strengthened but all hopes have, so far, been faded since rupee is melting down further with the passage of time.

The local currency which was earlier, firmed and was being sold under 100 against a dollar has now been selling at Rs 104 against greenback in the open market because of slow GDP growth and menace of insurgency across the country.

On Tuesday, rupee shed 18 paisa in relation to the dollar for buying at Rs 103.40 and it also lost 23 paisa for selling at Rs 103.43, said a Lahore-based dealer seeking anonymity.

It is a good omen that gap between selling and buying of greenback in the local market has been reduced significantly because of incumbent government measures. However, it is the need of the hour that government should take measures to keep foreign reserves rise so that traders and investors do not feel panic and avoid sending greenback abroad through illegal means.

The rupee lost 20 paisa for buying and selling at Rs 103.50 and Rs 103.70 while rupee lost 100 paisa versus the euro for buying at Rs 137.50 and Rs 137.75, he claimed.

He further said that the dollar’s demand remained intact for another day in Lahore that kept the local currency under pressure. The dollar was ended higher at Rs 103.30 and Rs 103.60 as its buying and selling rates against Rs 103.00 and Rs 103.50 of Monday, respectively.

Similarly, the rupee also maintained downward slide and was depreciated against the British pound. The pound’s buying and selling rates were further improved from the day earlier closing of Rs 158.50 and Rs 159.30 to Rs 160.50 and Rs 161.50, respectively, he added.

The dealers are hopeful that as soon as International lending agencies including IMF would pour dollar in State Bank’s account, the situation would likely to get better and the local currency might be sold under 100 against dollar in the open market.

Overseas Pakistanis to send record level of remittances this year: Dar

ISLAMABAD: Pakistan is likely to get a record level of remittances from the overseas Pakistan, about $16 billion during current fiscal year.

Federal Finance Minister Ishaq Dar said on Saturday that during fiscal year 2013-14 a record amount of remittances is expected.

“We have been taking measures to improve the economy of the country,” he said in a statement linking the confidence of overseas Pakistanis with economic measures of the government.

During fiscal year 2012-13, overseas Pakistanis including from United States, Kingdom of Saudi Arabia, United Kingdom, Middle Eastern states, Europe and other regions sent a record amount of $14 billion.

Rupee hits another all-time low vs dollar

KARACHI: The repayment of International Monetary Fund’s (IMF) Stand-by Arrangement of $145.10 million loan has put pressure on the local currency against the dollar as the local currency hit a record-low level of Rs 102.90 for buying in the interbank market on Friday.

The currency dealers said in open market the local currency changed hands at Rs 103.35 for buying against the greenback on back of recent past loan payment.

Market pundits predicted the rupee to go further down within the next few weeks as demand for the dollar was increasing and the importers were requiring more dollars to pay for their orders.

Fazal Ahmad a currency expert in Houston said the average greenback value against the rupee was close to Rs 98 in December 2012 in contrast to Rs 59.09 in December 2001. Today it marks a 65 percent-plus depreciation of the rupee against the dollar.

The payment in dollar for edible oil imports usually increases in September to November on back of increase in edible oil and vanaspati ghee domestic consumption in winter, he added.

The country’s foreign exchange reserves for payment of export bills and bills on oil, commodities and major raw industrial materials’ imports are also under immense pressure as demand for dollar has increased.

The constant fall in value of the rupee was multiplying the cost of doing business, especially for those who relied on imported industrial raw materials and machinery.

Moreover, this situation was inflating the overall import bill of the country, as Pakistan was importing large quantities of oil among other items to meet its ever-growing needs.

Pakistan was relatively rich in mineral resources and held strong potential for small businesses to flourish however, the rupee’s depreciation was stagnating the growth of these sectors and the government needed to give serious thought on harnessing the untapped mineral resources in order to improve exports.

Encouraging the local industry for enhancing exports and luring foreign investment through good incentives were some of the effective tools that the government could utilise to curb the downslide of the rupee.

Impact on consumers’ life: Depreciating rupee increases the cost of imports, which has a direct bearing on inflation. Basically import of goods becomes costlier whenever rupee depreciates as it always makes an impact on peoples’ day-to-day life as they are consumers of imported products.

Cost of petroleum products’ import is also bound to go up with the fall in value of domestic currency.

Increased inflation means more expenses, which in turn has potential to impact the financial planning process.

The falling rupee also hits finances of a number of foreign countries-based students who pay more on their education after every fall in rupee value.

Falling rupee is also a way for slowdown in economic growth. If the fall of rupee continues, the foreign investment will dry up thus creating a gap between investment required for growth and the actual investment made.

High inflation has caused the rupee to reach this stage. The demand for dollar has been strong because of higher imports day by day.

On the IMF front, Pakistan has to repay $4.4 billion in the next three years ($3.3 billion in FY14, $1.3 billion in FY15 and $0.60 billion in FY16).

Overseas Pakistanis remit $1.4b in July

LAHORE: Overseas Pakistanis remitted an amount of $1,404.39 million in July 2013 of the current fiscal year (FY13-14), showing an impressive growth of 16.57 percent or $199.68 million as compared with $1,204.71 million received during the same month of the last fiscal year (FY12-13).

Remittances received from most of the countries showed growth. The inflow of remittances during July 2013 from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $410.73 million, $252.41 million, $233.06 million, $221.93 million, $161.44 million and $38.59 million respectively as compared with the inflow of $349.66 million, $240.54 million, $215.30 million, $148.49 million, $140.36 million and $30.83 million respectively in July 2012. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the last month amounted to $86.23 million as against $79.53million received in the same month of the last fiscal year (FY12-13).

It may be recalled that in order to provide an ownership structure in Pakistan for remittance facilitation, the government of Pakistan through State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance had launched a joint initiative called Pakistan Remittance Initiative (PRI) in April 2009. This initiative has been taken to achieve the objective of facilitating & supporting faster, cheaper, convenient and efficient flow of remittances.


Customs more vigilant to stop flight of foreign currency

KARACHI: After imposition of ban on import of gold by the government, the Customs officials and other agencies have become more active to keep strict vigilance on illegal import of gold and foreign currency from airports and other border check posts, in the backlash of dramatic fall of Pak rupee against dollar in the local money market.

It is pertinent to mention here that the government has taken such steps after sharp fall of the local currency during the past few days.

In this regard, the Customs Department has been directed to check passengers going abroad and do not allow them to take money along with them exceeding the limit of US $1000.

Sources told Customs Today that the price of gold will increase in few days after Eid-ul-Fitr and the US dollar will also fall against Pak rupee in near future.

They said that the department is on high alert to stop the flight of precious foreign currency from the country.