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The Rawalpindi Chamber of Commerce & Industry (RCCI) on Friday expressed strong reservations over an increase of 150 basis points in the interest rate by the State Bank of Pakistan, taking it from 7.25 percent to 8.75 percent.

In a statement, President RCCI Nadeem Rauf urged the government to withdraw the hike as it would increase the credit cost of commercial banks, ultimately casting a bad impact on the growth of industrial activities and creating more hardships for the Small and Medium Enterprise (SME).

He said the central bank raised its interest rate by a sharp 150 basis points in one go which would discourage the investors considering Pakistan for investment.

Nadeem Rauf said Pakistan needed a quick revival of business and industrial activities to improve the economy which was badly hit by COVID-19. He underlined that the increased interest rate would make the cost of credit unaffordable for the business community.

The RCCI chief observed that the government was already facing pressure on the fiscal deficit. He said the increase in interest rate would heighten the budget deficit. He urged Advisor on Finance Shaukat Tarin to review the SBP announcement and hold a meeting with the business leaders to discuss and devise a new strategy to strengthen the economy.

Source: Pro Pakistani

The Pakistani Rupee (PKR) continued its extremely volatile and bearish run against the US Dollar (USD) for another day after it depreciated by 56 paisas against the greenback in the inter-bank market today. It hit an intra-day low of Rs. 175.5 against the USD during today’s open market session.

The local currency depreciated by 0.33 percent against the latter and closed at Rs. 175.24 today after it posted losses of 91 paisas and closed at Rs. 174.67 in the inter-bank market on Thursday, 18 November.

The local currency has surpassed its former record low against the USD from 26 October when it closed at Rs. 175.27, and is only a touching distance away from its all-time low of Rs. 175.73 from 12 November.

The Rupee has lost 0.28 percent against the dollar on a Week-on-Week basis, and 2.09 percent and 9.64 percent on Month-to-Date and Year-to-Date bases respectively, according to Capital Stake.

Rupee Spillover

The current account deficit widened from $1.13 billion in September to $1.66 billion in October during the ongoing fiscal year on the back of a moderate decline in exports and remittances and some uptick in services imports, according to the State Bank of Pakistan. Additionally, high energy prices kept the import bill elevated despite a downtick in non-energy imports.

Economic analyst A. A. H. Soomro told ProPakistani,

Current Account is heating up despite depreciation and various demand-reducing measures by SBP and the government. These levels are not sustainable amid rising demand growth and stubborn food and energy prices. It’s time to curb the demand and protect the precious dollars.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, discussed the Rupee’s interbank showing in a tweet earlier today. He said, “Yesterday, SBP called BANK HEADS & told them to avoid unnecessary buying of $ or breach limit. Banks R told 2avoid guiding importers or tell them to buy $ vs #PKR until it stabilizes.”

He added, “While, Net SBP FX RESERVES is down by $380mn. Market is likely to remain choppy”.

The PKR failed to post gains against the other major currencies as well and posted losses in the inter-bank currency market today.

It lost 44 paisas against the Canadian Dollar (CAD), 18 paisas against the Australian Dollar (AUD), and 15 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR).

The Rupee continued its decrepit sway against the resurgent Euro (EUR) after it posted losses of 40 paisas against the eurozone currency. It also posted losses of 13 paisas against the Malaysian Ringgit (MYR) and eight paisas against the Chinese Yuan (CNY).

Surprisingly, it managed to post gains of 10 paisas against the Pound Sterling (GBP) in the inter-bank currency market today.

Source: Pro Pakistani

The Federal Board of Revenue (FBR) will introduce virtual assessment of imported goods in parallel with the existing system of Appraisers Assessments at ports.

FBR Member Customs (Policy), Dr. Muhammad Saeed Khan Jadoon, on Thursday informed the Senate Standing Committee on Finance that FBR was going for the process of virtual assessment of imported goods. He said the virtual assessment would be done in parallel with the existing procedure of Appraisers Assessments of the imported goods.

He explained that the project of the virtual assessment was being tested at the level of FBR. He said the purpose was to minimize the role of the Customs Appraisers in the assessment of imported goods. The use of artificial intelligence would help in eliminating the role of the Customs Appraisers in the assessment of imported goods, he asserted.

The number of import and export consignments cleared through the green channel facility has been considerably increased, added the FBR Member Customs (Policy).

Source: Pro Pakistani

The Senate Standing Committee on Finance and Revenue has rejected the proposal of disconnecting mobile, electricity, and gas connections of non-filers.

The meeting of the committee was held under the chair of Senator Talha Mahmood on Thursday at parliament house which discussed the third tax amendment act presented by FBR in detail.

The panel not only turned down the proposal of disconnecting mobile, electricity, and gas connections of non-filers but also rejected the proposal if providing taxpayer information to NAB.

The Chairman committee said that this is cruelty to the people of the country as such a law is a violation of basic human rights. On the other hand, Senator Mohsin Aziz said that strict action should be taken against the non-filers.

Senator Musadiq Malik said that FBR wanted to get taxpayer records to NAB due to which it has proposed this law. In addition, the Senate committee has also rejected the proposals of not only obtaining tax from professionals but also imposing a tax on the above Rs. 20,000 electricity bill. Meanwhile, they also rejected the proposal of withdrawing sales tax on the import of meltable scraps.

The Chairman committee questioned who submitted this proposal. Senator Musadiq Malik said that steel mill owners are sending such proposals and I know who is behind this.

On the other hand, the panel has approved the proposals with regard to imposing a tax on imported apples from Afghanistan, extending tax waiver on the auto-disable syringe to December 31, 2021, abolishing sales tax on import of PSO terminals, getting 16% instead of 17% sales tax from Tier-1 retailers through debit or credit card purchasing and zero-rated regime for the packed milk.

Meanwhile, it also approved a 5% tax on the import of electric vehicles and sent above Rs. 5 million remittances through banks and exchange companies. The committee also discussed the issue being faced by the Iraqi Embassy in managing a $10 million account with Habib Bank Limited (HBL) as per the policy of SBP.

The meeting has taken serious notice of the absence of the governor SBP. The chairman committee said that he can order the police to arrest or present Governor SBP, Reza Baqir, in the committee if he was not turned up in the meeting.

Senator Saleem Mandviwala said that governor SBP did not appear in the last three meetings of the committee whereas the Iraqi Ambassador has appeared in the committee. Musadiq Malik also pointed out that the Ambassador of Iraq is representing his country in the committee and wanted that a privilege motion should be moved against Governor SBP.

The Chairman of the committee said that the country faced insults as the embassy was dealing in dollars and if anything happened to their money, an FIR would be filed against the Governor SBP.

The meeting was informed that HBL, during the month of June 2021, asked the State Bank of Pakistan (Exchange Policy Department) that it allows its client, the Embassy of Iraq, Islamabad, for monthly transfer of salaries of $100,000 to FCY accounts of their foreign national employees; besides it also requested to allow monthly withdrawal of $100,000 for traveling abroad purposes and allow receiving and retaining cash deposits up to $1,000,000 on monthly basis in Embassy’s FCY account, on account of visa fees, document attestation charges, and consular service fees, in form of foreign currency from respective applicants.

The meeting was in writing informed that with respect to the above-mentioned requests, SBP allowed HBL for monthly transfer of FCY for payment of salaries only to their foreign national employees and monthly cash withdrawal on account of traveling abroad purposes (funds to be used out of Pakistan) whereas, with respect to retaining cash deposit, it was advised to the HBL that there is already a mechanism in place whereby foreign embassies/consulates operating in Pakistan, collect visa/consular fees in their Pakistani rupee accounts.

Subsequently, the fees collected may be repatriated to their respective home countries, after seeking approval from the Foreign Exchange Operations Department (FEOD), State Bank of Pakistan-Banking Services Corporation through their Authorized Dealers. However, HBL has requested SBP to reconsider the request of the Iraq Embassy.

Source: Pro Pakistani

Electric Vehicle Startup Rivian has been making waves for becoming one of the biggest automakers in the world in terms of market valuation. It attained a market cap of $110 billion over the weekend, which placed it above other large automotive groups such as General Motors, Ford, and Volkswagen.

While most carmakers, analysts, and the public were in awe of the achievement, some analysts were skeptical and questioned the credibility of the market valuation.

They claim that Rivian has created its market cap without any “meaningful revenue” as it has only built less than 200 vehicles. They added that this valuation is an indication of a “stock market bubble” which will burst to damage the company’s financial standing and reputation.

CNBC recently highlighted that some major conglomerates, including Amazon and T. Rowe Price, are also interested in buying up to $5 billion worth of Rivian’s shares.

Industry experts had predicted that the investment would place Rivian against other EV manufacturers like Lucid, Fister, Lordstown Motors, and the Chinese EV-maker Nio.

Industry analyst and investor, Jason Calacanis, told billionaire investor, Chamath Palihapitiya, in a podcast that the company has already garnered solid investors and has, therefore, bolstered its own stance in the stock market. He added that Amazon has placed a fleet order for 100,000 Rivian R1T electric trucks, which has added to its revenue.

Rivian’s stock price is still soaring above $140, making it one of the top names in the car market. The race among electric car manufacturers is getting fiercer by the day with all the contenders eyeing global expansion and reaching for the lion’s share in the market.

Source: Pro Pakistani