December 2, 2018 (MLN): The last week of departed month witnessed a series of ups and downs as the month of December neared. The week kicked off with Economic Coordination Committees (ECC)’s decision to import Liquefied Natural Gas to cut gas deficit in winter season. The committee also approved setting up of Power Park Management by the government.
Moreover, Hammad Azhar, state minister for revenue apprised that government has decided to waive the penalty for late filing and condition of audit of salary group of late filer cases.
Apart from this, the government has also decided to reduce the prices of petroleum products by Rs.2 per litre, each for Petrol and Diesel. The prices of Kerosene and LDO will be reduced by Rs.3 & Rs.5 per litre respectively.
Foreign Investments:
The past week turned out to be a good omen in terms of foreign investment as international giants such as Coca Cola, Suzuki, and Pepsico expressed their intentions to expand their investments in Pakistan.
Potential investments from these companies add up to a total of around $1.8 billion, in upcoming years, with $200 million expected from Coca Cola, $450 million from Suzuki and around $1.2 billion from Pepsico.
Meanwhile, Exxon Mobil has returned to Pakistan after a gap of nearly 3 decades, revealed a press release on Wednesday.
FOREX:
On the last day of the month, value of Pakistani Rupee suffered a sharp decline of nearly Rs.10 per USD, while the greenback trade peaked at PKR 143 against dollar.
Since further devaluation of Rupee was one of the three main conditions that the IMF presented to Pakistan, in order to qualify for a bailout, this surfaced as the primary reason for devaluation.
Speculations concluded that the government might be planning to weaken the currency in several segments over time.
However, Minister for Finance Asad Umar said that the hike in dollar value against rupee was not linked to Pakistan's negotiations with the International Monetary Fund (IMF).
Addressing a press conference, the minister told that the IMF had not asked Pakistan to depreciate the rupee value to a certain level. The value of dollar against rupee was determined by the simple formula of demand and supply, and the current account deficit, which had swelled to $19 billion during the last year, was the reason for higher demand of dollar.
Nevertheless, by day end, PKR had recovered from almost all the losses made in early trade, during the second session of the interbank markets, as the US dollar dropped sharply to an overall low of 135/136.5 against USD.
Dollar at interbank from its high depicted a slide of Rs.5.50, and was being traded at PKR 136.5/137.25.
SBP raises policy rate by 150 basis points
The Monetary Policy Committee of the State Bank of Pakistan (SBP) decided to increase the Policy rate by 150 BPS to 10 Percent. The new policy rate will be effective from December 03, 2018.
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