IDEAS 2018: 1st-ever multipurpose battle vehicles launched
Pakistan has successfully launched the first-ever ‘multipurpose infantry fighting vehicle’ which will increase the combat capability of its armed forces in battlefields.
“We have launched for the first time in the history a multipurpose infantry fighting vehicle (MIFV) named [after the venomous snake] VIPER,” Heavy Industries Taxila’s (HIT) official told at the 10th edition of the four-day International Defence Exhibition and Seminar (IDEAS 2018), which concluded on Friday.
The huge vehicle is loaded with four major guns capable of shooting enemy and destroying tanks and other battle equipment and machinery from a distance of around four kilometres with the help of ‘gunner sight’.
Besides, it has a built-in ‘smoke grenade launcher’ which if and when triggered creates a screen of smoke in front of the VIPER and helps it disappear to change its location in tactical battle.
“It is also capable of shooting low-flying fighter jets,” the official elaborated.
SSUET offers admissions in management sciences degree programs
Education plays a significant role to design our future as a successful person in life and as a useful citizen in the society. It also reduces the challenges of life that one might face. Education is no doubt becoming very important for career building in this era. A person who acquires higher education will have more skills, capable of doing multiple tasks as well as meet the job requirement. In this regard, Sir Syed University of Engineering & Technology (SSUET) has been still offering quality of education in various disciplines in Pakistan through the contribution and excellent support of Chancellor, Mr. Jawaid Anwar and Vice Chancellor, Prof. Dr. M. Afzal Haque. SSUET has also started to offer admissions in similar bachelors and masters degrees in the field of management science under the supervision of highly qualified and well experienced faculty. Professor Dr. Abdul Rahman Zaki, the ex Chairman of the Karachi University Business School (KUBS) has assumed charge as the Chairman of the Faculty of Management Sciences department, SSUET. The University had commenced enrolment of students for the pilot MPhil, MBA and BBA morning also evening programs such as Finance, International Marketing, Project Management, Supply Chain Management, Human Resource Management and Islamic banking. At SSUET, the management also intends to launch PhD. program in the said disciplines soon. Considering the academic and professional acumen/management of SSUET as well as the experience of Dr. Zaki in this domain, the university has added management Sciences faculty, grooming business professionals for the expanding need of corporate sector and industry.
Oil and gas regulatory authority recommends hike of Rs6.21 per litre in petrol price
The Oil and Gas Regulatory Authority (Ogra) recommended the government on Thursday to increase the price of petrol by Rs6.21 per litre for December 2018 due to multiple rounds of rupee depreciation against the dollar.
Officials in Ogra told that the regulator had sent a summary to the Ministry of Energy (Petroleum Division) for notifying revised prices for the month of December. The prime minister is set to take the decision on Friday.
Ogra proposed an increase of Rs6.21 per litre in petrol, Rs2.00 per litre in high speed diesel (HSD), Rs9.91 per litre in kerosene oil and Rs7.79 per litre in light diesel oil (LDO). The regulator calculated these prices based on 17% general sales tax. Currently, the government is charging 4.5% general sales tax on petrol, 12% on HSD, 1.5% on kerosene oil and no tax on LDO.
If the government accepts Ogra’s recommendation, then petrol prices would rise from the existing Rs97.83 per litre to Rs104.04 per litre. CNG is known as an ‘alternative fuel’ but its consumption has declined due to the ban on indigenous gas in CNG outlets mainly in the Punjab province. Lately, the demand for petrol has risen and CNG outlets in Punjab have started using imported gas.
The regulator also recommended an increase of Rs2.00 in the price of HSD, which is widely used in transport and agriculture sector. If this revision takes place, the price of HSD would rise to Rs114.94 per litre from the existing Rs112.94 per litre.
Monetary policy: SBP hikes key interest rate by 150 basis points to 10pc
Going beyond market expectations, the State Bank of Pakistan (SBP) on Friday increased the benchmark interest rate by 150 basis points to 10% – a six-year high level.
The rate hike was very much in line with the International Monetary Fund’s (IMF) demand that Pakistan push the interest rate into double digits.
“The new rate will come into effect on December 3, 2018,” the central bank announced.
With the fresh revision, the central bank has raised the interest rate by a cumulative 4.25 percentage points in five rounds since January 2018. The prime objective is to make borrowing expensive in a bid to apply brakes on the accelerating inflation in the country.
“Near-term challenges to Pakistan’s economy continue to persist with rising inflation, an elevated fiscal deficit and low foreign exchange reserves,” the SBP said in the Monetary Policy Statement released on Friday.
Earlier, the benchmark Consumer Price Index (CPI) inflation hit a 50-month high at 6.8% in October 2018 on a year-on-year basis compared with 5.1% in September 2018, according to the Pakistan Bureau of Statistics (PBS).
AHL Research said, “We forecast the inflation rate will peak at 9.05% in January 2019, 9.9% in February and 10% in March following the recent increase in gas, electricity and petroleum product prices.”
During recent talks for a bailout package, the IMF asked Pakistani authorities to increase the interest rate to double digits.
Earlier in the day, Pakistani currency weakened 3.8% and closed at an all-time low of Rs139.05 to the US dollar in the inter-bank market. The currency depreciation was also in line with the IMF’s recommendation.
The SBP said average inflation in the first four months of FY19 increased 5.9% compared with 3.5% in the corresponding period of FY18. “This trend is even more pronounced in core inflation, which indicates growing inflationary pressures in the economy,” it said.
Rupee ends at all-time low of 139.05 in inter-bank market
The rupee weakened 3.8% and closed at an all-time low of Rs139.05 to the US dollar in the inter-bank market on Friday. In early hours of the day, the rupee hit an intra-day record low of Rs144 to the greenback.
This was the sixth round of the rupee depreciation since December 2017. On Thursday, it closed at Rs133.99. Cumulatively, the rupee has dropped 31.8%, or Rs33.55, on closing basis in the last 11 months.
The International Monetary Fund (IMF) had recently proposed that Pakistan devalue its currency to Rs145-150 to the US dollar during its talk with the newly installed Pakistan Tehreek-e-Insaf (PTI) government that is seeking a bailout package of $6-12 billion.
Besides, the central bank on Friday hiked the benchmark interest rate by a massive 1.5 percentage points to a six-year high of 10 per cent.
The hike in the rate was beyond market expectation for one percentage point hike, but was well in line with the IMF conditions to push the rate into double digits.
“Yes, the IMF conditioned rupee devaluation. The fact of the matter is that there was no other option left, but to devalue the rupee to avoid default on international payments,” said Pakistan Forex Association President Malik Bostan.
The devaluation of the rupee has made the dollar expensive, which is aimed at slowing down outflow of the foreign currency from the country and boost inflows. The expensive dollar would make imports costly and exports attractive.
The expansive dollar would also encourage overseas Pakistani to send higher remittances to homeland that hold the key towards increasing country’s foreign currency reserves, narrowing down trade and current account deficits and improving balance of payment situation for Pakistan.
Bostan said Pakistan has received a sluggish response against its efforts to acquire a multibillion dollars soft loan from friendly counties to avoid the IMF bailout under stringent conditions.
The situation left no option but to devalue currency to avoid default on import payment and debt repayment. Pakistan is to pay around $9 billion in debt repayment by June 2019.
Govt borrowing from SBP surges to historic high at Rs5.4tr
The federal government’s reliance on the central bank to remain afloat increased massively as borrowing from the State Bank of Pakistan (SBP) surged to the highest-ever Rs5.4 trillion by the end of September, an increase of Rs1.8 trillion or 48% in just three months.
This will be one of the main concerns for the Pakistan Tehreek-e-Insaf (PTI) government because the International Monetary Fund (IMF) would like to see a drastic reduction in debt stock of the central bank, in case both the sides agree on a bailout programme.
The unchecked lending by the SBP also shows that the central bank remains subservient to the finance ministry. Almost half of the addition to borrowing from the central bank was because of retirement of commercial bank loans that are reluctant to invest in long-term government securities in anticipation of an increase in interest rate.
The SBP has released the figures of the central government debt for the July-September 2018 quarter. Overall, the federal government’s debt increased to Rs24.73 trillion, a net addition of Rs520 billion from July through September.
The overall increase in the central government debt was in line with the budget deficit recorded in the first quarter of fiscal year 2018-19.
The ballooning public debt remains a concern due to the previous government’s inability to attract non-debt creating inflows and enhance tax revenues. The Public Debt Management Risk Report of June 2018 showed that most of the indicators moved further towards dangerous levels while three breached the red line, set in the medium-term debt strategy.
The PTI government has not yet changed the course of the fiscal policy and it is largely implementing the policies that were followed by the previous Pakistan Muslim League-Nawaz (PML-N) administration.
The SBP’s latest debt bulletin showed that the most worrisome aspect was the continued growth in short-term domestic debt that exposed the government to various refinancing and interest rate risks. The federal government’s total domestic debt increased to Rs16.9 trillion, an addition of Rs504 billion or 3% in three months. The share of short-term public debt increased alarmingly to 57.2% or Rs9.7 trillion by the end of September.
In June last year, the short-term domestic debt stood at 54.1% or Rs8.9 trillion. The short-term debt grew Rs779 billion or 8.8% in three months.
In the first quarter, the federal government retired the debt got through market treasury bills (MTBs) from commercial banks. The government’s total borrowing through MTBs decreased from Rs5.2 trillion to Rs4.3 trillion, a reduction of Rs971 billion in three months.
In contrast, the MTBs issued to replenish the cash rose to Rs5.34 trillion, a net addition of Rs1.8 trillion or 48% from July through September.
The change in the composition of domestic debt suggests that the government will not meet goals of the second Medium-Term Debt Management Strategy 2016-19 that has been designed to increase the debt maturity profile to reduce the refinancing risk.
In contrast to the short-term debt, the country’s long-term debt decreased 3.6% to Rs7.2 trillion. Its share was 45.5% in the total domestic debt at the end of June 2017, which fell to 42.9% by September this year.
The share of bonds issued by the federal government also shrank from Rs3.4 trillion to Rs3 trillion despite an overall increase in public debt. A net reduction of Rs332 billion or one-tenth in bond holdings indicates that banks are not willing to lock funds for longer periods despite getting favours from the federal government.
However, the debt acquired through the sale of prize bonds increased from Rs851 billion to Rs893.2 billion at the end of September 2018.
The external debt accrued by the central government slightly jumped to Rs7.8 trillion in the first three months of the current fiscal year. There was a net increase of Rs16 billion.
These figures do not include loans of Rs810 billion taken from the IMF and loans of $3 billion from China, which are the responsibility of the central bank.
Govt not to artificially control rupee value: Asad Umar
Finance Minister Asad Umar on Friday said the federal government will no more artificially control the currency value, which analysts read as the beginning of implementation of prior actions suggested by the International Monetary Fund (IMF) for a bailout package.
But Umar insisted that Pakistan did not accept the IMF’s demand for a total free float exchange rate regime and 3.7% devaluation of the currency was not the result of the IMF conditionality. The total devaluation in the past 11 months has been 32.3% or Rs34, which will unleash an inflation tsunami.
Hours after local currency nosedived to Rs146 to a dollar before recovering to Rs139 in the interbank, Umar addressed a press conference and explained reasons behind the steep fall in intra-day trading. Planning Minister Khurso Bakhtiar and Minister of State for Revenue Hammad Azhar accompanied him.