Iranian President Ebrahim Raisi visits China for three days to strengthen economic cooperation
Raisi will set out for Beijing on Monday evening in response to an official invitation by Chinese President Xi Jinping, Iran’s state news agency IRNA said.
Both presidents met for the first time last September in Uzbekistan at a summit for the Shanghai Cooperation Organisation, where the Iranian president called for expanded ties.
On his upcoming trip, Raisi is expected to hold private talks with Xi, and delegations from both countries are due to sign “cooperation documents”, according to IRNA.
The agency added that Raisi will also take part in meetings with Chinese businessmen and Iranians living in the country.
Iran and China have strong economic ties, especially in the fields of energy, transit, agriculture, trade and investment.
ISLAMABAD: Talks between the International Monetary Fund and Pakistan will resume virtually on Monday, a Pakistani official said, as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.
The two could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.
“Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest,” Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.
Talks centre around reaching an agreement on a reforms agenda under the country’s $6.5 bailout programme, which it entered in 2019.
An agreement on the ninth review of the programme would release over $1.1 billion.
On Friday, IMF had issued a short four-paragraph statement at the conclusion of its mission’s 10-day visit to Islamabad, stressing that “timely and decisive implementation of policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability”.
It had added that virtual discussions will continue to finalise the implementation details of policies, implying that an agreement to revive the programme through a staff-level agreement may still take some time as Pakistan moves to execute the prior actions.
“The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions,” the mission chief’s, Nathan Porter, was quoted as saying in the statement.
“Considerable progress was made during the mission on policy measures to address domestic and external imbalances.
“Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.
“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development.”
Pakistan’s foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports.
A resumption of the IMF programme would also unlock other avenues of funding for Pakistan.
An agreement, if reached, would still need to be cleared by the IMF board.
The Pakistani rupee registered a marginal loss against the US dollar, depreciating 0.06% in the inter-bank market on Monday.
As per the State Bank of Pakistan (SBP), the currency closed at 269.44 against the US dollar, a decrease of Re0.16. The currency has depreciated by 23.3% during the ongoing fiscal year against the greenback.
During the previous week, the currency had appreciated 2.71% against the US dollar to close at Rs269.28 in the inter-bank market.
The rise is attributed to recent correction of exchange rate following the end of the peg on dollar. Exporters are also selling their dollars in the market as they believe that the rupee is fairly valued. Amid the free-float of the exchange rate, inflows from illegal markets diverted towards formal channels.
Moreover, the International Monetary Fund (IMF) team was on a visit to Pakistan and market participants expected the resumption of bailout package. The programme remains stalled as the ninth review of Pakistan’s economy remained incomplete. Although the IMF team left without the signing of a staff level agreement, Finance Minister Ishaq Dar notified the receipt of Memorandum of Economic and Financial Policies (MEFP).
Globally, the US dollar hovered near a five-week high against major peers on Monday on rising bets for prolonged Federal Reserve policy tightening ahead of a crucial consumer price report the following day.
The dollar index – which measures the greenback against six counterparts including the yen, euro and sterling – added 0.068% to 103.65, keeping close to last Tuesday’s high of 103.96, the strongest level since January 6.
Oil prices, a key indicator of currency parity, slumped by about 1% on Monday as investors focused on short-term demand concerns ahead of key US inflation data. Brent crude futures fell $1.14, or 1.3%, to $85.25 a barrel by 1005 GMT after a 2.2% gain on Friday.
The inflow of overseas workers’ remittances continued to decline in Pakistan, clocking below the $2 billion mark for the first time in 31 months at $1.9 billion in January 2023, a drop of 13% on a year-on-year basis.
According to data released by the State Bank of Pakistan (SBP) on Monday, the inflow of remittances stood at $2.18 billion in the same month of the previous year.
The $1.894 billion remittance inflows recorded in the first month of 2023 are the lowest since May 2020. The January 2023’s figure is also the fifth successive month-on-month decline.
On a month-on-month basis, remittances fell 10% as they amounted to $ 2.102 billion in December 2022. On a cumulative basis, the inflow of remittances during the July to January period of the fiscal year 2022-23 stood at $16 billion, 11% lower than $17.98 billion in the same period of the previous fiscal year.
“Black market impacted the remittances flow in January 2023, but still not a bad number, given huge gap between official and black market rate,” said Ismail Iqbal Securities Limited in a note.
“Should improve going from February onwards,” added the brokerage house.
A significant decline in remittance was mostly observed in inflows coming from GCC countries.
Remittances from the United Arab Emirates amounted to $269 million during the month, a decline of 30% compared to $382 million in January 2022.
Overseas Pakistanis in Saudi Arabia remitted the single largest amount in January as they sent $408 million during the month. This was nearly 26% lower than the $549 million sent by expatriates in the same month of the previous year.
Inflows from the United Kingdom inched up 2% as they increased from $324 million in January 2022 to $330 million in January 2023.
Moreover, remittances from the European Union remained largely stable as they amounted to $240 million in January 2023. Overseas Pakistanis in the US sent $214 million in January 2023, registering a year-on-year increase of 1%.
As per SBP’s latest weekly report, the total liquid foreign reserves held by the country stood at $8.54 billion as of February 3, 2023 compared to $8.74 billion as of Jan 27, 2023.
During the week under review, SBP’s reserves decreased by $170 million to $2.918 billion due to external debt repayments. The SBP’s reserves can cover the import of two weeks.
Indus Motor Company Limited’s Profit After Tax (PAT) fell 72% from Rs4.75 billion in 2QFY22 to Rs1.33 billion in 2QFY23, translating into Earning Per Share (EPS) of Rs16.9 compared to an EPS of Rs60.4 for the same time last year.
Its Board of Directors had met on February 10 to review the company’s condensed financial and operating performance for the half-year that ended December 31, 2022.
Along with the result, the company also announced interim cash dividend of Rs10.2/share. This is in addition to the first interim cash dividend of Rs8.2/share, already paid.
The assembler of Toyota automobiles in Pakistan posted net sales revenue of Rs49.584 billion, a 29% decrease compared to Rs69.63 billion recorded same period last year.
“Although effective selling prices are higher, volumes have shrunk to half of the 19,426 units sold in 2QFY22,” said AKD Securities Limited.
IMC witnessed a gross loss of Rs491 million during 2QFY23, as compared to a gross profit of Rs5.264 billion posted in same period last year.
“Cost pressures especially currency devaluation has outweighed the impact of price hikes and increased volumetric sales,” said Ismail Iqbal Securities Limited.
Meanwhile, the ‘other income’ segment of Indus Motors Company stood at Rs3.454 billion in 2QFY23, a healthy increase of 38% as compared to Rs2.502 billion registered in SPLY.
Last month, IMC said it will completely shut down its plant from February 1 to February 14, citing inventory shortage.
When the company restarts production on February 15, it will do so on a single-shift basis until further notice, it said in communication issued to the Pakistan Stock Exchange.
Indus Motor had said the company and its vendors continue to face major hurdles in import of raw materials and receiving clearance of their consignments from commercial banks.
Just days before this, Indus Motor had increased prices of its cars by as much as Rs1.16 million, following significant depreciation of the Pakistani rupee against the US dollar. This was its second price-hike in two weeks.
Automobile sales in Pakistan fell 38% in December 2022 to 16,811 units on a year-on-year basis, according to data released by Pakistan Automotive Manufacturers Association, due to restrictions on import of completely knocked down (CKD) units and problems pertaining to opening of letters of credit (LCs) for imports.
The Federal Investigation Agency’s (FIA) Cyber Crime Wing on Monday booked former finance minister Shaukat Tarin under the Prevention of Electronic Crimes Act (PECA) over a leaked audio. Subsequently, it also registered an FIR and booked Tarin under clauses 124-A and 505, reported Aaj News.
In August 2022, two leaked audios, allegedly containing conversations between Tarin and then Khyber-Pakhtunkhwa (KP) finance minister Taimur Jhagra and then Punjab finance minister Mohsin Leghari, appeared to reveal a plot by the three participants to sabotage the International Monetary Fund (IMF) Programme that resumed in mid-2022. In March 2022, the loan scheme was stalled after the then leadership announced subsidy on fuel and electricity prices.
Speaking to Aaj News, Pakistan Tehreek-e-Insaf (PTI) leader Mussarat Jamshed Cheema lamented “the latest move of the government”, adding that Pakistan reported 6% growth when Tarin was finance minister.
“He upheld the economy during Covid-19 and boosted well-being. He is a success story for Imran Khan’s government,” she said.
On Sunday, Interior Minister Rana Sanaullah had said that the government had permitted the FIA to arrest the former finance minister in the case related to his alleged role in derailing the crucial IMF deal, Aaj News reported.
In the audios leaked in August 2022, Tarin can be purportedly heard ordering the two ministers to write a letter to IMF aimed to block the disbursement of $1.1 billion tranche after the end of 7th and 8th review of Pakistan’s economy.
Prior to that, Jhagra had written a letter to the Ministry of Finance conveying the same. In the audio, Leghari can be allegedly heard opting out from wrtting that letter.
The FIA then issued a notice to Tarin, saying that an inquiry had been initiated against him on the basis of the alleged audio call to Jhagra.
Reportedly, the FIA completed a preliminary inquiry into Tarin’s audio leaks and sought approval from the interior ministry to initiate legal proceedings against him, leading to his arrest.
Original Source: Business Recorder