Senate Panel Summons AGP & DG NAB to Discuss Contentious Recoveries

The Senate Standing Committee on Finance, Revenue, and Economic Affairs has decided to summon the Auditor General of Pakistan (AGP) and the Director-General (DG) National Accountability Bureau (NAB) amid the recently triggered debate on the record of recoveries claimed by NAB since its inception.

The Senate committee met at the Parliament House on Wednesday with Senator Talha Mehmood in the chair. The committee discussed and expressed annoyance over the devaluation of the Pakistani rupee and the ongoing inflation in the country, in addition to a few other significant issues.

Deputy Governor State Bank of Pakistan (SBP) failed to satisfy the Senate panel. He explained that supply and demand determined the exchange rate. He observed that COVID-19 was also one of the factors due to which the rupee depreciated and inflation rose. He argued that the dollar price had caused inflation in some African countries and Latin America too. He remarked that the central banks all over the world intervened in the value of the dollar.

Senator Talha Mahmood said that dollar was being smuggled to Afghanistan due to which the rupee was depreciating. Senator Sherry Rehman and others also took notice of the statement given by Governor SBP, Raza Baqir, regarding an increase in dollar value against the Pakistani Rupee. Sherry noted that the international organizations were predicting that the dollar would go up to 200 rupees. The committee members termed the statement “irresponsible” and called for an explanation by Raza Baqir. The Chair underlined that Governor SBP was not a political office, so he should not make political statements.

Senator Anwar-ul-Haq Kakar said that it was the responsibility of SBP to control the fluctuations of the rupee. He said that the rupee had depreciated sharply since the arrival of the new Governor SBP. Senator Musadik Malik asked if the SBP had not intervened in the value of the dollar in the last three years. He underlined that the value of the rupee had waned sharply while the exports had increased only by 3% in the last three years. The committee decided to seek clarification from the Governor SBP on the statement.

Senator Saadia Abbasi asserted that the committee should also be informed about the recent negotiations held with the International Monetary Fund (IMF). Additional Secretary Ministry of Finance said that he could not give a detailed answer in this regard. He sought more time to get details of the negotiations.

Chairman Committee, Senator Talha Mahmood, expressed his intent to call the Finance Adviser and other officials for a briefing to know the contents of the recent agreement with the IMF. The Chairman Committee was of the view that the rupee continued to mark down sharply against the dollar but exports did not surge. He said that Pakistan had engaged with the IMF twenty-three times, but was still on the grey list of the financial watchdog, the Financial Action Task Force.

Referring to the recoveries claimed by the National Accountability Bureau, the Additional Secretary of Finance informed that so far NAB has recovered Rs. 821 billion. Answering a question raised by Senator Saleem Mandviwala, the Additional Secretary of Finance said it was not known where the recovered money was collected. The money was not being deposited in government accounts. It is not known in which account the NAB deposited the recovery of Rs. 821 billion, he added.

The committee members discerned that no one in the country had a record of such a huge amount of money, which was a matter of surprise and concern. After deliberation, the Chairman decided to pen a letter to the AGP and DG Accounts NAB and summon them to the next meeting. The Chairman emphasized that the amount recovered by NAB would also be audited.

The discussion also took place on question No.39-D, asked by Senator Walid Iqbal, regarding the rules and policies on the appointment of Executive Directors, Directors and representatives from Pakistan at the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Economic organization, World Trade Organization, and any international or regional bodies.

Senator Saleem Mandviwala, Senator Sherry Rehman, Senator Kamil Ali Agha, Senator Musadik Malik, Senator Anwaar-ul-Haq Kakar, Senator Saadia Abbasi, and Senator Faisal Sabzwari attended the meeting while Senator Walid Iqbal participated as a mover. Additional Secretory Finance Division, Additional Secretory Economic Division, officials from SECP, and FBR were also part of the meeting.

Source: Pro Pakistani

Pakistan’s Cotton Production Almost Doubles Due to Timely Rains

Pakistan’s cotton output has soared up to 6.2 million bales in the current season (June-Nov), a surge of 81 percent compared to the same period last year, owing to timely rains and better incentives to the farmers.

According to Pakistan Cotton Ginners’ Association (PCGA), the cotton yield was only 3.45 million bales last year in the June-November period.

Rain timings played a huge role in the cotton output. Timely rain in September boosted the cotton harvest this year, said former PCGA Chairman, Jassu Mal Leemani.

“We expect a cumulative production of 7-7.2 million bales in current season 2021-22 and around 10 million bales in 2022-23,” said the former chairman.

Cotton output was dismal last year, a multi-decade low of 5.64 million bales due to untimely rainfall in August, resulting in the loss of 2 million bales in Sindh alone, explained Leemani.

Leemani highlighted that cotton output also increased due to better price incentives to the farmer as the price of cotton flower (phutti) per 40 kg was doubled to Rs. 6,000 in the ongoing year against Rs. 3,000 per kg in the previous year. Similarly, cotton price is currently around a peak of Rs. 17,000 per 40 kg compared to Rs. 11,000 per 40 kg last year.

Famers would prefer other crops — rice, maize, and sugarcane — over cotton as they would get higher returns from other crops. Leemani emphasized that the government should support the textile industry with a better cotton policy as the textile sector is contributing to 60 percent of the total exports annually.

In the ongoing year, the exceptional cotton output will ease the pressure on the foreign reserves of Pakistan, as the textile industry will meet most of its cotton needs locally and will import less cotton from global markets.

In the international market, cotton prices have also doubled to $1.2 per pound against $0.6 per pound a year ago, added the former chairman.

Low cotton harvest forces the textile industry to import cotton to meet their manufacturing needs. Due to low cotton output FY2020, the textile industry imported $1.48 billion worth of cotton yarn (857,373 tons) for yarn manufacturing, noted the Pakistan Bureau of Statistics (PBS).

Source: Pro Pakistani

Pakistan Secures Multi-million Dollar Murabaha Financing for Petroleum Imports

Pakistan has arranged $761.5 million in Murabaha financing from the International Islamic Trade Finance Corporation (ITFC) to import petroleum products on deferred payment.

The development was announced in a series of tweets by Economics Affairs Division (EAD) on 4 November.

The ITFC has increased Pakistan’s Murabaha financing facility from $300 million to $761.5 million, which Pakistan State Oil (PSO), the Pak-Arab Refinery Company Limited (PARCO), and Pakistan LNG can utilize to import oil and gas from the international market.

The EAD said that the increase in the financing limit is due to the higher demand in the country amid the strong recovery of the economy.

The financing facility was announced after a discussion between the Minister for Economic Affairs, Omar Ayub Khan, and the CEO of the ITFC Hani Salem Sonbol.

According to the EAD, the “ITFC financing will help to ease pressure on the exchange rate and stabilize forex reserves. It also reflects the confidence of IFIs in Pakistan’s economy. ITFC & EAD also agreed to continue their cooperation in future for maximum utilization of US$ 4.5 billion financing window”.

The government is taking steps to maintain its dollar reserves and exchange rate against the backdrop of the prices of commodities and petroleum products hovering at historic highs.

Saudi Arabia also recently extended support to Pakistan and resumed a $1.5 billion per year oil facility on deferred payments and $3 billion in safe deposits. The $4.5 billion eased the pressure on the exchange rate as the Pakistani Rupee gained Rs. 2.48 against the greenback in a single day on 28 October after reaching an all-time low of Rs. 175.27 per Dollar.

Source: Pro Pakistani

Pakistan to Develop Trade Ties With Neighbors and Promote Foreign Investment

Advisor on Finance Shaukat Fayaz Tarin and Advisor on Commerce Abdul Razzak Dawood called on Prime Minister Imran Khan today (Thursday). Advisor on Finance briefed the Prime Minister on the overall economic situation.

The commerce advisor briefed the Prime Minister regarding his recent visit to Turkmenistan for improving connectivity in the region for maximum economic gains. He also apprised the Prime Minister about his upcoming visit to Iran and its role in improving prospects of regional connectivity and bilateral trade between the two countries.

The Prime Minister emphasized improving trade with regional countries as it would help in increasing exports.

The Prime Minister stated that the government is providing all possible support to foreign investors through the “Ease of doing Business” policy.

Source: Pro Pakistani

MCB Bank, 1Link Partner to Facilitate PayPak Cardholders in eCommerce Transactions

Building upon SBP’s vision of promoting Pakistan’s domestic payment scheme PayPak, MCB Bank (MCB) has signed an agreement with 1LINK, to facilitate PayPak cardholders in conducting online eCommerce transactions.

MCB PayPak Debit Card customers will soon be able to shop online and make payments from anywhere in Pakistan, adding more value to their digital banking experience.

PayPak was launched by 1LINK in 2016 adding Pakistan to the list of countries in the world that have their own domestic payment schemes.

Ever since its launch, PayPak has managed to impressively garner countrywide acceptance on ATMs and POS while simultaneously ensuring the facilitation of eCommerce transactions.

At the agreement signing, 1LINK CEO, Najeeb Agrawalla, stated, “The enablement of PayPak cards for eCommerce transactions has now become a necessity owing to the exponential rise in digital payments due to the pandemic.”

“PayPak has come a long way and we aim to make PayPak the card of choice for all Pakistanis by providing unparallel acceptability and benefits. We congratulate MCB for enabling their PayPak cardholders to make online purchases on e-Commerce marketplaces within Pakistan, with no compromise on security,” he added.

Shahzad Ishaq, Group Head Consumer & Digital Banking MCB Bank, said, “MCB has a tradition of providing reliable, convenient and forward-looking services to our customers. This initiative is a milestone on our journey to promote domestic products and services by digitizing experience, in line with Regulator’s vision.”

“By empowering PayPak cardholders, MCB will further deliver financial inclusion and mobilize customers towards adoption of digital payments,” he added.

Source: Pro Pakistani