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Price of gold plunges further by Rs 1500 to...

September 24, 2020 (MLN): The price of 24 karat gold continued losing ground as it decreased by Rs. 1500 on Thursday to Rs. 112,500, against the price Rs. 114,000 reported on Wednesday.

According to the data released by the All Sindh Saraf Jewellers Association, the price of 10-gram gold also decreased by Rs.1,286 to Rs. 96,451 against the price of Rs. 97,373 reported yesterday.    

On the similar note, the price of per tola silver of 24 Karat plunged by Rs.70 to Rs. 1,150 while that of 10-gram silver witnessed a decline of Rs 60 and was sold at Rs.985.94.  

The gold prices in the international market decreased by US $35 and traded at US $1,857, the association reported.

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Turkey’s Central Bank raises interest rates by 2%

September 24, 2020: Turkey's central bank has raised its main interest rate for the first time since September 2018, boosting it by two percentage points to haul the lira up from historic lows.

The bank said the one-week repo rate would go from 8.25 percent to 10.25 percent.

The lira gained around one percent in value against the US dollar within minutes of the announcement, after touching a record low of 7.71 earlier in the day.

"Massive surprise, and positive," said Timothy Ash, an analyst at BlueBay Asset Management.

The coronavirus pandemic has forced nations worldwide to cut rates to revive their stalled economies.

But Turkey has been burning through its hard currency reserves to support the lira, which has lost nearly 22 percent of its value against the dollar this year and is one of the world's worst performing emerging market currencies.

The Moody's ratings agency estimated on Monday that Turkey's hard currency reserves were now at a 20-year low.

A central bank statement said it "decided to increase the policy rate by 200 basis points to restore the disinflation process and support price stability".

Inflation edged up to 11.77 percent in August from 11.76 percent in July but it has remained stubbornly in the double digits in the past few years.

This means that Turkey is running a negative real interest rate, where bank deposits and bonds lose value over time, forcing investors out of the market and Turkish nationals to convert their liras into dollars or euros.

The bank last increased its main rate in September 2018 from 17.75 percent to 24 percent owing to a currency crisis caused by tense relations with the United States.

But President Recep Tayyip Erdogan opposes high rates, once describing them as "the mother and father of all evil", and called for them to be lowered to stimulate growth.

Erdogan last year sacked the bank's governor and appointed Murat Uysal, under whose direction the rate has been cut nine times.

Ash said the rate decision "suggests the (bank) listened to the market and decided they had to move to avoid a disorderly devaluation and potential balance of payments crisis."

"They are not out of the woods yet, but they have given themselves a fighting chance."


SBP Eases Cash Margin Restriction on Imports

September 24, 2020: The State Bank of Pakistan (SBP) has eased 100 percent cash margin requirement on the import of certain raw materials to support manufacturing and industrial sectors and further enhance their capacity to contribute towards the recovery of the economy in post COVID-19 era.

The cash margin condition was initially imposed in 2017 on 404 HS Codes and later in 2018 on a further 131 items, with a view to contain  the import of mostly consumer goods and to allow room for the import of more growth-inducing items.

Considering the challenges posed by the COVID-19 to the manufacturing sector and other economic segments, and on the representations made by various businesses and associations, the SBP re-evaluated the cash margin requirements and decided to remove this requirement on 106 items/HS Codes. 

The removal of the cash margin requirements on these items will support businesses’ cash flows and liquidity, by freeing up funds previously held with the banks under cash margin against imports, and route these funds towards avenues of growth and development that will benefit the economy.

The SBP remains committed to facilitate industries and businesses in contributing to the growth and development of the country, and is ready to take any further actions required to support the overall manufacturing and industrial activity.

Press Release

AOB imposes a fine of Rs 50,000 on Aslam...

September 24, 2020: The Audit Oversight Board (AOB) has imposed a fine of Rs 50,000 on Aslam Malik & Company, Chartered Accountants for multiple violations of the law.

One of the reported partners of the firm signed six auditor’s reports of listed companies on behalf of the firm without first attaining the necessary authority from ICAP to sign such reports on behalf of the audit firm. The firm had failed to report this partner for the purposes of audit quality control review. The firm also filed false information to AOB regarding this partner and provided a false declaration that the information provided was updated and true.

The action was taken by AOB after providing an opportunity of being heard to the firm and explaining its position in writing and in person. AOB also directed the firm to submit an action plan comprising substantive measures to address the weaknesses in its systems and controls.

AOB is the independent regulatory authority that oversees the quality of audit of financial statements of public interest companies that include all listed companies. The stakeholders of these companies include investors, shareholders, lenders, and tax authorities which place their trust in the independent assurance provided by external auditors that the financial statements prepared by the management present a true and fair view of the companies’ financial statements. Only the audit firms registered with AOB are authorized to audit the financial statements of a public interest company.

PKR appreciates by 26 paisa at interbank trade

September 24, 2020 (MLN): Pakistani rupee (PKR) appreciated by 26 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 165.96 per USD, against yesterday's closing of PKR 166.23 per USD.

The rupee endured a relatively dull trading session with very little intraday movement, trading in a range of 34 paisa per USD showing an intraday high bid of 166.25 and an intraday Low offer of 165.95.

Within the Open Market, PKR was traded at 165.80/166.80 per USD.

Alternatively, the currency lost 14 paisa to the Pound Sterling as the day's closing quote stood at PKR 211.19 per GBP, while the previous session closed at PKR 211.06 per GBP.

On the other hand, PKR's value strengthened by 87 paisa against EUR which closed at PKR 193.51 at the interbank today.

On another note, within the money market, the overnight repo rate towards close of the session was 7.05/7.10 percent, whereas the 1 week rate was 7.00/7.05 percent.


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