Government takes new $300mn commercial loan
Pakistan has taken a $300 million commercial loan at interest rates ranging from 7.2percent to 7.7percent – the first new non-Chinese financing facility in years, which will help meet external financing requirements of the International Monetary Fund (IMF) programme.
Government sources said that the country had taken a foreign source-based loan from United Bank Limited (UBL). The bank has arranged the facility from Gulf countries.
A loan of $250 million has been arranged at an interest rate of one-year Secured Overnight Financing Rate (SOFR) plus 3percent margin. This translates into roughly 7.2percent. The loan will be paid back in less than one year, they added.
Another $50 million is being availed at one-year SOFR plus 3.5percent, which is equal to 7.7percent at today’s rates, the sources said.
The interest rates are lower than the two-year Chinese commercial loan finalised in September.
Ishaq-led panel to craft power tariff cut policy
Prime Minister Shehbaz Sharif has constituted a seven-member committee to finalize plans to set power tariff by lowering taxes in the light of discussions with the International Monetary Fund (IMF), well-informed sources told.
Headed by Deputy Prime Minister Senator Ishaq Dar, the committee assigned the task consisted of Minister for Economic Affairs, Ahad Khan Cheema, Finance Minister, Senator Muhammad Aurangzeb, Power Minister, Awais Leghari, Secretary Power, Dr. Muhammad Fakhr e Alam Irfan, Secretary Petroleum, Momin Agha and Chairman FBR, Rashid Langrial.
The proposal under consideration is reduction in taxes from January to June 2025. However, Finance Division has conveyed that the proposed elimination of various federal (Divisible Pool) and provincial taxes on sale of electricity with an estimated revenue impact of Rs 290 billion (about one billion dollar) during January-July 2025, will adversely impact GoP’s commitment with regard to tax revenue collection, overall primary and fiscal balance and provincial surplus under the Extended Fund Facility (EFF).
State Bank adopts Shariah standard
The State Bank of Pakistan (SBP) has announced adoption of AAOIFI Shariah Standard No. 59 – Sale of Debt aimed at standardizing and harmonizing Shariah practices in Islamic Banking Institutions (IBIs) with immediate effect subject to clarifications/amendments.
The adoption of this standard is in addition to applicable regulations, instructions and directives issued by SBP from time to time. SBP said that failure to comply with these instructions may invoke penal action under the relevant provisions of the Banking Companies Ordinance 1962.
No UAE visa issue, waiting for Islamabad to ink FTA
UAE Consul General in Karachi Dr Bakheet Ateeq Al Rumaithi announced on Thursday that talks for a free trade agreement (FTA) between the United Arab Emirates and Pakistan are in advanced stages and would come into effect as soon as Islamabad signs the agreement.
The envoy also categorically rejected the impression that the UAE is rejecting visas to Pakistanis, emphasising that Pakistan remains a top priority for the UAE for business and investment.
The Consul General made these remarks while talking to the media on the sidelines of the opening of Emirates World in Karachi.
Bagasse-based IPPs agree new contracts
The cabinet has given the go-ahead for signing revised agreements with eight bagasse-based independent power producers (IPPs), owned by the ruling elite and political barons.
According to the revised agreements, the IPPs will reduce their working capital component of tariff by 50percent with effect from October 31, 2024.
These agreements are estimated to lead to savings of Rs238 billion when operated at full load. The IPPs agreed to change their return on equity (ROE) and return on equity during construction (ROEDC) components of tariff to 17percent per annum, calculated at the rupee-dollar exchange rate of 168, with no future dollar indexation, effective from October 31, 2024.
Foreign currency reserves increase $31mn to $12.08bn
The foreign exchange reserves, held by the State Bank of Pakistan, rose $31 million to $12.08 billion in the week ended December 13, 2024, according to data released by the central bank on Thursday.
With the fresh increase, Pakistan’s total liquid foreign currency reserves reached $16.63 billion, reflecting the country’s improving financial position that provided around three months of import cover. Out of the total deposits, commercial banks held reserves of $4.55 billion.
In the precious metals market, gold prices fell, mirroring the decline in international markets. The price of bullion per tola dropped Rs2,600 and settled at Rs273,300, according to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The drop followed a rise in gold prices on Wednesday, when the per-tola rate increased Rs1,000. On the international front, bullion prices also slid on Thursday. The APGJSA reported the global rate at $2,621 per ounce (including a $20 premium), reflecting a loss of $26 during the day.
On aircraft retrofitting, UAE carrier spends $2bn
Emirates has officially launched its new travel store in Karachi, making it the airline’s first experiential retail concept rolled out in West Asia.
The store was inaugurated by Essa Sulaiman Ahmad, Emirates’ Senior Vice President for Commercial Operations, West Asia and Indian Ocean, in the presence of Hamad Obaid Ibrahim Salem Al-Zaabi, Ambassador of the United Arab Emirates (UAE).
Bakheet Ateeq Al-Rumaithi, Consul General of the UAE in Karachi, who was also present at the event, highlighted the strong ties between the UAE and Pakistan.
Speaking about participation in the privatisation of Pakistan International Airlines (PIA), Essa Sulaiman Ahmad said, “We are concentrating more on our own airline and do not look at buying any stake or carrier. We just spent $2 billion to retrofit our aircraft. We are definitely looking at our own growth.”