June 28, 2020 (MLN): The highlight of the departed week was the unexpected cut in the interest rate by SBP at its meeting on 25th June 2020, where it decided to reduce policy rate by further 100 bps to 7%.
Apart from this, the other important economic and business events that took place during the last week are in order so as to become acquainted with the recent developments in Pakistan’s economic and public policy.
Events of Importance through the Week:
On Friday, government backpedaled on its decision to provide relief, as it revised and increased the prices of various Petroleum Products by 26.59 percent to 66.09 percent per liter effective from June 26, 2020.
On energy front, Pakistan signed $2.4b agreement for 1,124MW Kohala Hydropower Project which is the biggest ever investment on a single project in the country.
The same day, Pakistan and Saudi Arabia had agreed to strengthen collaboration between the Aviation Industry of the two countries in order to provide better services to the people.
On Thursday, Ministry of Finance stated that Pakistan has received USD 1.5 billion in COVID 19 and development policy-related assistance from the World Bank, Asian Development Bank and Asian Infrastructure Investment Bank.
On the downside, the International Monetary Fund (IMF) in its Weekly Economic Outlook report released on Wednesday stated that it expects Pakistan’s economy to show one percent growth in Fiscal Year 2021 (FY21).
Furthermore, Economic Coordination Committee (ECC) of the Cabinet approved revised standard security package documents such as implementation agreements (GOPIA), GOP guarantee, power purchase agreement (PPA), water use agreement (WUA) under Policy for Power Generation Projects 2002 for the hydropower projects in the private sector
Besides, the Federation of Pakistan Chambers of Commerce and Industry president Mian Anjum Nisar urged the government to control surge of dollar against Pakistani currency, as the rupee has dropped to more than two-month low of 167.65 against greenback in the interbank market while it has fallen to 168 versus the US dollar in the open trade.
On Wednesday, Economic Coordination Committee (ECC) of the Cabinet has allowed the private sector to import wheat to control prices of wheat and flour in the market and ensure the availability of these commodities at a reasonable price across the country throughout the year.
On equity front, TPL Insurance Limited, a subsidiary of TPL Corp Limited, informed via notice to Exchange that DEG –Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”), has expressed its interest in acquiring 20% stake in the Company.
On Tuesday, the Governor of the State Bank of Pakistan chaired the first meeting of the steering committee on housing and construction finance in which he deliberated that housing finance was a priority area for the central bank and reiterated that SBP will play a facilitative and supportive role for its promotion in the country.
On Monday, Pakistan Stock Exchange (PSX) urged the Government to rationalize the Capital Gains Tax (CGT) structure in line with international best practice and reduce the rate, which is currently one of the highest in the region.
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