Monetary matters:
SBP keeps policy rate unchanged at 5.75%:
The
State Bank of Pakistan (SBP) left the target rate on hold at 5.75% for the next
two months in the monetary policy announcement on Saturday.“I was expecting a
25-basis-point (bps) raise because of the recent rise in inflation in the
country,” commented National University of Sciences and Technology (NUST)
School of Social Sciences and Humanities Dean Dr Ashfaque Hasan Khan.When the
central bank kept the policy rate unchanged two months ago, the inflation had
not looked threatening, which was not the case now, said Khan. By raising the
rate by 25 bps, the SBP could have
given the signal to the market that it was watching the developments closely,
he added.
ADB approves
$325m loan to connect off-grid areas in K-P, Punjab:
The
Asian Development Bank (ADB) on Friday approved a $325-million loan to provide
electricity to off-grid communities in Khyber-Pakhtunkhwa (K-P) and Punjab, as
almost half of Pakistan’s rural population remains deprived of electricity.The
Board of Directors of the Manila-based lender approved the loan to enhance
Pakistan’s energy security by helping install clean energy sources and improve
people’s access to electricity in two of the country’s provinces, according to
an official handout.It is the second loan the ADB approved in less than 24
hours, bringing fresh approvals to $525 million. Unlike the previous loan of
$200 million that will be used for budget financing, the fresh borrowings have
been obtained for project implementation.
No relief for
Punjab despite gas price cut:
The
Pakistan Textile Exporters Association (PTEA) has expressed concern over the
disparity in industrial gas prices within the country, saying the recent
reduction of Rs200 per mmbtu will prove unfruitful as the Punjab textile
industry is already running on re-gasified liquefied natural gas (RLNG).In
order to register protest and announce a strategy against discrimination with
the Punjab textile industry, all textile associations and the Faisalabad Chamber of Commerce and Industry will hold a joint
press conference on Monday.
Government urged
to normalise trade ties with India:
The
World Bank has urged Pakistan to fully normalise trade relations with India to
facilitate deep forms of trade integration as this step would allow Pakistan to
benefit from New Delhi's fast growth and promote complementarities, including
value chain activities and investment potential.This is one of the key
recommendations of a technical note titled "Pakistan-unlocking private
sector growth through increased trade and investment competitiveness"
prepared by a World Bank team comprised of Rafay Khan of the Trade and
Competitiveness, South Asia and Nadia Rocha of the Trade and Competitiveness
Global Practice of the World Bank Group. Guillermo Arenas, Olivier Cattaneo,
Michael Ferrantino and Saima Zuberi also gave their input to the note.World
Bank's team argues that Pakistan still needs to fully leverage its strategic
location and its proximity not only to regional but also global trade leaders.
Integration with its neighbouring countries and regions is all the more
important given the need for the country to diversify both its product basket
and markets. Removal of international sanctions on Iran, as a starting point
offers Pakistan the greatest opportunity to enter a relatively untapped market.
Oil market would
balance even without output cuts: Saudi Arabia
Saudi
Arabia's energy minister Khalid al-Falih said on Sunday that he believed the
oil market would balance itself in 2017 even if producers did not intervene,
and that keeping output at current levels could therefore be justified.Under a
preliminary agreement reached in September in Algeria, the Organisation of the
Petroleum Exporting Countries would reduce its production to between 32.5
million and 33 million barrels per day, its first supply curb since 2008.OPEC
oil ministers meet in Vienna on Wednesday in an effort to finalise that deal;
OPEC also wants non-OPEC producers such as Russia to support the intervention
by curbing their output.Falih said on Sunday Saudi Arabia was sticking to its position
on the Algiers agreement that everyone should cooperate."We expect the
level of demand to be encouraging in 2017, and the market will reach balance in
2017 even if there is no intervention by OPEC. But OPEC intervention aims to
expedite this balance and the market recovery at a faster pace," he said.
China offers huge
trade opportunities:
Luo
Qiang, leader of the high ranking Chinese business delegation, on Sunday said
that there was a vast scope for further enhancement of bilateral trade between
Pakistan and China in furniture sector and urged the private sector of two
countries to establish joint ventures for further upgradation of business
ties.During visit to 6th Interiors Pakistan exhibition here at the Expo Centre,
Qiang praised the quality of calligraphic engraved furniture and admitted the
fact that the furniture items produced in the country have great demand in
international markets.He offered huge trade opportunities to Pakistani business
community in furniture sector and invited Pakistani counterparts to visit China
to explore further avenues of mutual investment in various sectors.Talking to
journalists, Qiang said the purpose of their visit to Pakistan was to share
experiences and exchange views with local business community and explore new
opportunities of matchmakings with Pakistani counterparts.
Money Market:
Bank borrowing rises:
THE
government raised Rs289.74bn from the auction of Market Treasury Bills of
various tenors last Thursday, exceeding its target of Rs250bn. The central bank
had received much higher bids of Rs480.38bn. In the earlier auction also the
target set was exceeded.Of the total raised amount, three month T-bill fetched
the highest Rs187.89bn at a cut off yield of 5.95pc, followed by 6-month T-bill
Rs100.91bn at 5.95pc and 12-month T-bills Rs944bn at 5.949pc.The central bank
had received highest bid for three month T-bill Rs255.66bn, followed by 6-month
T-bill with Rs188.40bn and 12-month T-bill Rs36.31bn.
Rupee report:
Dollar strenghtens against rupee:
In
the local currency market, the rupee/dollar parity remained stable in interbank
dealings despite extensive pressure in the open market.Amid fluctuations, since
April, the rupee, being in a tight spot, continued to slide against the dollar
in the open market since the start of 2016.The rupee has fallen around 1.03pc
so far this month and by nearly 2pc since July. The rupee is currently trading
at Rs107 against the dollar in the open market, its lowest level since December
2015.Globally, the dollar rolled higher to a nearly 14-year peak versus major
rivals last week, driven by an expected high US inflation and interest rates,
leading to a more than 6pc gain in the past two months, its strongest showing
over a similar period since early 2015.The pound traded near a multi-decade low
after its strongest monthly performance in eight years, hitting a nine-week
high against other currencies. Last week on the interbank market, the rupee
parity remained unchanged continued to trade at Rs104.84 and Rs104.85 for the
first three consecutive sessions.
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