Pakistan Daily Economy Update - 7 July

Transcription

1. Jul . 7, 2017 KCCI - eBulletin Rupee firms 1.5% after slumping 3.1% a day earlier Pakistani rupee firmed 1.5% against the dollar after slumping 3.1% a day earlier in a de facto devaluation by the central bank. The rupee was trading at 106.20 per dollar before closing at 105.70 at the day end against 108.25 a day earlier. Finance Minister Ishaq Dar has come out strongly against the sudden move in the currency, saying that the current account deficit is stable and it is not the role of the central bank to try and manage the account. BR. Tariq Bajwa appointed governor: Dar criticizes State Bank over rupee plunge Finance Minister Ishaq Dar, in a meeting with the presidents and CEOs of commercial banks, has said that the govt. would appoint former Secretary Finance Tariq Bajwa as a permanent governor of State Bank of Pakistan (SBP). The Minister said that the rupee fall was an "artificial" adjustment and that no one including him can take the decision of making adjustment to the exchange rate. BR. Acting SBP governor behind rupee plunge: Dar Finance Minister Ishaq Dar has hinted that acting governor State Bank of Pakistan was behind the sudden steep fall in value of the Pakistani rupee, who while acting alone, directed the banks to let the local currency depreciate against greenback. While announcing to launch a probe to find out the reasons behind such an irrational move, Dar said that the federal government has not changed its foreign exchange policy and that pre-slide value of PKR 104.90/USD was the ‘real value’ of the Pakistani currency. The PKR 3.50 devaluation in a single day is a unique accident of Pakistan’s history, he said. Tribune. FBR collects PKR 12.5Bn WHT from non-filers FBR has collected PKR 12.5Bn on account of withholding tax on non-cash banking transactions by non-filers during FY17, marginally down 3.1% over PKR 12.9Bn collected during FY16. An official at Large Taxpayers Unit Karachi said cash-based transactions, including heavy investment in prize bonds, was the major reason for decline in withholding tax collection. The News. Russia’s Gazprom and OGDC of Pakistan sign joint venture deal In a major development, Russia’s Gazprom International and Pakistan’s Oil and Gas Development Company Limited (OGDCL) have entered into a joint venture deal that is expected to attract $3-4Bn in the country. An MoU in this respect was signed in Moscow, aimed at mutual cooperation, joint ventures and use of state-of-the-art technology that would aid exploration and development. Russia has already expressed its interest to invest $8Bn in Pakistan and a major part of it will go in the country’s ailing energy sector. Tribune. Firms’ enrolment surges 34% With the registration of 8,286 companies in FY17, the total number of registered companies in the country has reached 81,493 - an increase of 34% compared to FY16. The SECP has said that the service sector took the lead with the incorporation of 96 new companies, followed by the trading sector with 86 and construction with 84. Dawn. Auto vendors oppose govt’s proposal on EDB Auto vendors are not in favor of the government’s proposal that different ministries and departments will deal with the auto sector issues following the closure of the Engineering Development Board (EDB). Auto and two wheeler sectors, tariff would be dealt by FBR, FTA by Ministry of Commerce while standardization will be handled by the Ministry of Science and Technology. Dawn. ADB ready to give over $ 6Bn loans The Asian Development Bank (ADB) has indicated that it could give over $ 6Bn in loans to Pakistan over the next three years, as the govt. has asked for increasing the assistance. ADB would provide the assistance under the 2018-20 operation plan for Pakistan. Vice President ADP is currently visiting Pakistan from Jul. 5-7, 2017 to finalize the plan as well as to discuss how to provide assistance to Pakistan in a better way. The ADB could release on average $ 2Bn per year, which is far higher than the annual assistance Pakistan is currently receiving i.e. around $ 1.5- 1.6Bn per year. BR. \ Criteria stipulated for SEZs under CPEC The criteria for establishment of Special Economic Zones (SEZs) under CPEC stipulates a minimum area of 50-acres (with no maximum limit) and allows zone developers, private or in public-private partnership, to purchase land on ownership or lease from central/provincial/local governments. The Provincial Investment Promotion Authority would be responsible for SEZs within its jurisdiction for supervision and operation of the SEZ Authorities and be the focal entity responsible for investment promotion. BR. Prime Minister for early implementation of CASA-1000 While addressing the Quadrilateral Session of CASA-1000 conference in Dushanbe, Prime Minister Nawaz Sharif has pointed out that tenders for transmission lines from Kyrgyzstan to Tajikistan and from Tajikistan to Afghanistan have been floated and are currently being evaluated. In a session which was attended by Tajik and Afghan Presidents and Prime Minister of Kyrgyzstan, Prime Minister Nawaz Sharif said that on its completion, Pakistan will get 1,000MW and Afghanistan 300MW electricity in summer time, from Tajikistan and Kyrgyzstan. This project will help bring a number of economic, social and environmental benefits to member countries. BR. Oil industry seeks time for compliance The oil industry has sought 1-2 years for up gradation of oil tankers fleet to ensure all vehicles meet required regulatory standards, and for shifting oil movement to pipelines instead of roads in 3-4 years to eliminate risk factors. OCAC – an umbrella organization of almost two dozen OMC’s and refineries said that it has worked out a three-pronged plan to further strengthen the existing system of oil transportation to ensure safe delivery and to avoid tragedies like the one in Ahmedpur. Dawn. Islamic banking guidelines The SBP has developed detailed guidelines for conversion of conventional banks into Islamic banks. The process of conversion consists of three stages: approval for the conversion process, conversion of existing conventional banking branches into Islamic banking branches and the issuance of a full-fledged Islamic bank license. Dawn. Reserves jump by $ 10Mn Pakistan’s total liquid foreign exchange reserves amounted to $ 21.36Bn on 30th June, up $10Mn from a week ago. Reserves of the SBP decreased $ 233Mn to $ 16.14Bn due to payments on account of external debt servicing. Net foreign exchange reserves held by commercial banks amounted to $ 5.2Bn, up 4.8% from the preceding week. Dawn. Food prices rising globally Rising prices of cereals, meat and dairy products have pushed the global food price index up by 1.4% in Jun’17 compared to last month and 7.0% FY17 compared to last year. According to the UN Food and Agriculture Organisation, the rise in the food price index, a measure of the monthly change in international prices of a basket of food commodities, was largely because of surging prices of high-protein wheat due to deteriorating crop conditions in the United States. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul 6-Jul PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.70 106.55 44,823 2.17 45.21 1,224.4 43,071 15.98 6,484 6.16% 30-Jun $ Bn 21.37 -2.35% -1.23% -1.30% NM** -0.64% -0.12% -0.20% -0.38% 0.00% 0.02% WoW 0.04% YoY -2.13% -3.13% 20.60% -42.12% -132.03% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-May 17 Remittances $ Bn 17.46 Jul-May 17 Exports* $ Bn 18.54 Jul-May 17 Imports* $ Bn 48.54 Jul-May 17 Trade Balance* $ Bn -30.00 Jul-May 17 Current Account $ Mn -10,641 % 4.16 Avg. CPI-FY17* Jul-Jun 17 May-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Jul-16 GBP, 6-Jul-17, 138.5 EUR, 6-Jul-17, 121.7 USD, 6-Jul-17, 107.0 Oct-16 USD Jan-17 GBP Apr-17 Jul-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Have your own definition of success...so you can fulfill your dreams, not someone else’s expectations of your dreams." Elliot Fletcher Chart of the Day 0 Pakistan's Current Account Deficit Vs. Exchange Rate (FY13-17) -2,000 -4,000 -6,000 -8,000 -10,000 -12,000 FY13 FY14 FY15 Current Account ($ Mn) (L.H.S) * = Rates are for Interbank market FY16 11MFY17 106 105 104 103 102 101 100 99 98 97 96 95 *Exchange Rate (PKR/US) (R.H.S) Source: KCCI Research, SBP Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk