The rupee continues its winning streak against the dollar amid “market optimism”

- International - February 16, 2023
The rupee continues its winning streak against the dollar amid "market optimism"
The rupee continues its winning streak against the dollar amid "market optimism"

Local currency closes at 265.38 in the interbank market.

ISLAMABAD: The government has decided to summon the National Assembly session on Wednesday (today) to take up the mini-budget as per the conditions agreed with the International Monetary Fund (IMF).

The International Monetary Funds logo at its headquarters. The News/File

Highly-placed sources told The News Tuesday that a bill containing a package of proposals would be placed before the House for adoption. The bill is likely to be passed in one go in today’s sitting.

The bill would be consigned to President Dr. Arif Alvi immediately for assent. The sources said the president could hold the bill for 10 days but he had assured Finance Minister Ishaq Dar of giving his assent soon after receiving the bill.

The sources reminded us that certain duties and taxes would be put in place as soon as Federal Finance and Revenue Minister Senator Ishaq Dar would present the bill in the House.

Prime Minister Shehbaz Sharif, who didn’t attend the last session, would be present today. The session will commence at 3:30 pm with Speaker Raja Pervaiz Ashraf in the chair. It would be the 47th session of the existing National Assembly. The government has been contacting the assembly members on an emergency basis to ensure the maximum presence in the House. The exercise was started Tuesday afternoon soon after the finance minister met the president.

The sources said President Arif Alvi was reluctant to issue an ordinance for enforcement of the mini-budget. He was trying to convey that since the joint sitting of parliament was in session, it wouldn’t be appropriate to promulgate a presidential ordinance for fiscal legislation. The sources said the president was reminded that the ongoing sitting of the two houses of parliament didn’t come in the way of promulgation of the ordinance. He was told that the ordinance could not be issued while the National Assembly or the Senate was in session but Alvi stuck to his contention.

It was later decided that the National Assembly session should be summoned for the purpose. The Finance Bill, approved by the federal cabinet Tuesday evening, would become a part of the legislation after it was passed by the National Assembly. Meanwhile, Leader of the Opposition in the National Assembly Raja Riaz Ahmad has asked his group members to attend the session. Later in the evening, the government decided to summon the Senate session at 4:30 pm.

The sources said the bill would be transmitted to the Senate soon after its passage by the National Assembly. The Senate would condone the period fixed for deliberations through the suspension of the rules of business and return the bill to the National Assembly. The sources said the government had planned to impose new taxes this week. Muhammad Anis adds: The Finance Supplementary Bill, 2023 will be presented in the National Assembly and Senate on Wednesday (today) for approval after the federal cabinet okayed it on Tuesday.

In this regard, the separate sessions of the two houses were summoned after President Arif Alvi refused to promulgate the supplementary bill ordinance in a meeting with Finance Minister Ishaq Dar. The president advised the finance minister to seek approval from the parliament. The National Assembly will meet at 3:30 pm while the Senate session will be held at 4:30 pm. The cabinet meeting was informed about the imposition of additional taxes on luxury items as well as a one percent increase in the sales tax.

The Pakistani rupee continued to rise against the dollar on Wednesday, continuing its winning streak in the interbank market as the government prepares to present a mini-budget to meet International Monetary Fund (IMF) conditions.

In the interbank market, the rupee closed at 265.38 after rising 1.96%, or 0.74%, against yesterday’s closing of 267.34, according to data from the State Bank of Pakistan (SBP). Capital markets expert Saad Ali told The News that the government is taking the necessary steps to meet the conditions set by the global lender and resume the stalled loan program.

This leads to optimism about the resumption of the IMF program, which will help rebuild the country’s foreign exchange reserves through multilateral and bilateral assistance, he added. Foreign exchange reserves held by SBP fell to $2,916.7 million on Feb. 3, just enough to provide about three weeks of import coverage.

“The government is rapidly taking precautions, bringing Pakistan closer to resuming the IMF program. In addition, inflows are improving due to the narrower gap between the official and informal markets,” Fahad Rauf, head of research at Ismail Iqbal Securities, told The News on Tuesday. The government led by Prime Minister Shehbaz Sharif is poised to submit the 2023 Finance Law to parliament later today, which is expected to pass by Thursday and will pave the way for authorities to impose taxes amounting to Rs 170 billion – in line with IMF demands.

After 10 days of face-to-face discussions in Islamabad last week, Pakistan and the IMF began virtual talks on how to keep the country afloat without a deal. The country’s economy is in dire straits and plagued by a balance-of-payments crisis as it seeks to service large external debt amid political chaos and deteriorating security.

Prime Minister Shehbaz previously called the terms of the $1.1 billion loan installment “unimaginable.”

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