Pakistan seeks emergency $3 billion Saudi cash injection
Pakistan on Wednesday requested Saudi Arabia to urgently provide $3 billion in cash after its foreign exchange reserves fell to a critically low level, as the new army chief was also expected to play a role in bagging the bailout during his upcoming maiden visit to the Kingdom.
Finance Minister Ishaq Dar made the request during a meeting with Nawaf bin Said Al-Malki, the Saudi ambassador, according to his ministry’s officials.
It was the second consecutive day when the finance minister held meetings with foreign diplomats in his efforts to seek their financial support and also influence the International Monetary Fund (IMF) to soften its stance on releasing its $1.2 billion tranche to the country.
Finance minister promises 150pc executive allowance
Finance Minister Ishaq Dar on Wednesday promised to end the financial discrimination faced by officers serving in the Pakistan Secretariat. After fresh details suggested that the annual impact of ending the injustice was Rs1.3 billion, the finance minister promised an award of 150 percent executive allowance within one week.
After Dar’s assurance, the officers belonging to the Economist Group, Technical Group, and Information Service Group ended their 13-day pen down strike until December 14th, the day on which the finance minister has promised that every officer from grade 17 to 22 serving in the Pak-Secretariat will be equally treated.
Saudi Arabia committed to averting Pakistan
Saudi Arabia is committed to averting Pakistan’s current economic crisis – worsened recently by climate-change induced flash floods – to help the country achieve political stability and safeguard its national security, said Dr Ali Awadh Asseri, the Kingdom’s former ambassador to Pakistan on Wednesday.
Speaking at the Islamabad Conclave the former ambassador said, “This is clear from Crown Prince Mohammed bin Salman’s personal resolve to address Pakistan’s immediate financial needs and also guarantee long-term investments in the country’s energy sector.”
“The Saudi leadership is committed to investing $20 billion in refinery, petrochemical complex, mining and renewable energy projects in Pakistan. But there is also tremendous scope for Saudi public and private investment in other sectors such as textiles, sports, leather goods and surgical equipment,” he suggested.
Pakistani banks reluctant to open wheat LCs
Pakistani banks have refused to open letters of credit (LCs) for wheat import from Russia, fearing the United States may impose a fine on them owing to an intense row between the Cold War super powers over the Ukrainian conflict.
Two Pakistani banks have already been slapped with penalties in the US due to regulatory violations. Though Washington has not imposed any sanctions on Pakistan’s trade with Russia, banks are wary of opening LCs for engaging in trade with Moscow.
Pakistani banks have flatly refused to open LCs without making queries about wheat import from Russia, sources close to the developments told sources. Now, according to sources, another available option is being explored for bringing wheat shipments from Russia. Pakistan requires supplies of the staple commodity as the recent massive floods have damaged its crops.
At port vegetable containers stuck
The government finds itself in a paradoxical situation where it has to decide whether to avoid food supply disruption or preserve foreign exchange reserves as hundreds of containers are stranded at the port on grounds of limited letters of credit (LCs). At the Karachi Port, 250 containers of onion, approximately worth $2.107 million, 63 containers of ginger worth $816,480 and 104 containers of garlic worth $2.533 million are stuck.
Some 0.6 million tonnes of soybean is also stuck at the port on grounds of unavailability of LCs. “Are we really keen to provide relief to the common man?” asked All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (PFVA) Patron Waheed Ahmed while talking to the sources.
Government targets exporting manpower
Federal Minister for Overseas Pakistanis and Human Resource Development (OP & HRD) Sajid Hussain Turi on Tuesday said that the government is working to allocate a quota to Overseas Employment Promoters (OEPs) in order to increase manpower exports with a target of one million exports of manpower this year. Addressing the Islamabad Chamber of Commerce and Industry (ICCI), Turi said that he is tapping into new markets and has visited many countries including Romania, Portugal and Greece, who have shown an interest in importing manpower from Pakistan. “Malta, Poland, Hungary, South Korea, Japan, Malaysia, Tajikistan, Saudi Arabia, Iran and Iraq have also shown an interest in importing Pakistani manpower and MoUs are being signed with many of them,” he said. “Over 4700 OEPs are working in Pakistan, of which about 2200 are active,” he said, emphasising that “OEPs should play a role in promoting the export of manpower and to facilitate them in this respect, the government will be including OEPs in delegations so they can explore new avenues as well.
Government gets less-than-targeted financing in t-bills auction
The Government borrowed on Wednesday a mere Rs215 billion from commercial banks against the target of Rs850 billion as the banks jacked up the lending rate significantly. The Government acquired financing through the auction of three-, six- and 12-month T-bills. Cut-off yields (lending rates) on the papers increased by up to 129 basis points to a record high of nearly 17 percent. Had the government borrowed more, the lending rates would have gone up further. The sharp increase in the rate of return for commercial banks came after the central bank surprisingly jacked up its key policy rate by 100 basis points to a 23-year high at 16 percent on Friday. More importantly, the banks offered a total of Rs646 billion in financing, though they knew that the government had targeted to borrow Rs850 billion through the auction. This suggests that the banks had a dearth of funds or they were expecting a further hike in the central bank’s policy rate.