Pakistan's central bank has temporarily halted the rupee's free fall against the US dollar, thanks to its recent monetary intervention. But the Pakistani currency will remain under pressure because of the country's worsening current account deficit, decreasing foreign direct investment inflows, rising cost of oil imports and dwindling foreign-exchange reserves due to the repayment of debt.
On September 26, State Bank of Pakistan bought as much as US$60 million of rupees to bolster the local currency, which has been among the worst performers in Asia in the past three months. That led to an unprecedented single-day fluctuation in the dollar's value, which fell to 105.50 rupees from 110.50 rupees that day.
Nevertheless, the rupee has weakened nearly 8.5 per cent against the dollar in the past three months. That reflects the government's inability to meet the IMF's demand for a decisive halt of the currency's decline – a condition the IMF attached to its approval on September 5 for a $6.6 billion bailout loan to Pakistan.
In addition, Pakistan's central bank's foreign exchange reserves now amount to just $6bn, only enough to cover imports for six weeks. As such, the central bank is not in a position to further shore up the value of the rupee.
True, the central bank's currency intervention provides a temporary cushion for the rupee's depreciation, but its market value cannot be stabilised and sustained over the long term without the government addressing the structural economic problems, money laundering and the smuggling of US dollars out of Pakistan.
In terms of imports, Pakistan's bill has been ballooning mainly because of its oil imports. Unfortunately, Pakistani exports have not risen in tandem with imports over the past decade. The value of Pakistani exports are about half that of the nation's imports.
The widening gap is contributing to the hollowing out of Pakistan's foreign exchange reserves, fuelling currency speculation.Islamabad should therefore take measures to increase exports and reduce its ever-rising import costs.
As Pakistan is heavily reliant on oil imports for its energy needs, the rupee's ongoing decline raises the country's cost of importing oil, which is priced in US dollars.
Meanwhile the goverment is unnerving Pakistanis by allowing tax officials to access the bank accounts of depositors. And in an effort to levy a 0.5 per cent income support tax, the government has made it mandatory for account holders to declare their cash holdings when they file their tax returns. That has prompted people to withdraw their funds from the banks.
A key reason for the rupee's devaluation against the dollar is the smuggling out of US dollars.
The central bank governor Yaseen Anwar recently told the senate standing committee on finance that funds of around $25m a day, or $9bn a year, are smuggled out of Pakistan through airports in Karachi, Lahore and Islamabad.
That is exacerbating the country's foreign-exchange reserves woes and the rupee's market value. If that figure is true, that means Pakistan is losing an amount equivalent to its total annual foreign exchange reserves.
To be sure, the rupee's depreciation is increasing Pakistan's public debt to the tune of 270bn rupees without additional borrowing. And without stemming the currency's decline, Islamabad will be unable to contain the ensuing inflation.
Now is the right time for Islamabad to do all it can to resolve this problem, because the current economic situation is worse than that in 1998 when international sanctions were imposed on Pakistan after it conducted nuclear tests. Even then, the rupee did not depreciate as significantly as it has over the past three months.
A possible solution is for the government to securitise monetary remittances from Pakistanis working abroad. That could shore up the government's fiscal position, enabling it to halt the rupee's slide and restore confidence in the currency.
Next, the government should incentivise Pakistanis to retain their bank deposits in rupees, as some may switch to foreign currency accounts to profit from the relative depreciation of the rupee.
And for good measure, the government should also impose a levy on foreign currency accounts as it did with rupee bank deposits.
Syed Fazl-e-Haider is a development analyst in Pakistan. He is the author of books including The Economic Development of Balochistan.
business@thenationa.ae
Civil War
Director: Alex Garland
Starring: Kirsten Dunst, Cailee Spaeny, Wagner Moura, Nick Offerman
Rating: 4/5
SPEC SHEET: NOTHING PHONE (2)
Display: 6.7” LPTO Amoled, 2412 x 1080, 394ppi, HDR10+, Corning Gorilla Glass
Processor: Qualcomm Snapdragon 8+ Gen 2, octa-core; Adreno 730 GPU
Memory: 8/12GB
Capacity: 128/256/512GB
Platform: Android 13, Nothing OS 2
Main camera: Dual 50MP wide, f/1.9 + 50MP ultrawide, f/2.2; OIS, auto-focus
Main camera video: 4K @ 30/60fps, 1080p @ 30/60fps; live HDR, OIS
Front camera: 32MP wide, f/2.5, HDR
Front camera video: Full-HD @ 30fps
Battery: 4700mAh; full charge in 55m w/ 45w charger; Qi wireless, dual charging
Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Google Pay)
Biometrics: Fingerprint, face unlock
I/O: USB-C
Durability: IP54, limited protection
Cards: Dual-nano SIM
Colours: Dark grey, white
In the box: Nothing Phone (2), USB-C-to-USB-C cable
Price (UAE): Dh2,499 (12GB/256GB) / Dh2,799 (12GB/512GB)
Company Profile
Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000
If you go
- The nearest international airport to the start of the Chuysky Trakt is in Novosibirsk. Emirates (www.emirates.com) offer codeshare flights with S7 Airlines (www.s7.ru) via Moscow for US$5,300 (Dh19,467) return including taxes. Cheaper flights are available on Flydubai and Air Astana or Aeroflot combination, flying via Astana in Kazakhstan or Moscow. Economy class tickets are available for US$650 (Dh2,400).
- The Double Tree by Hilton in Novosibirsk (+7 383 2230100,) has double rooms from US$60 (Dh220). You can rent cabins at camp grounds or rooms in guesthouses in the towns for around US$25 (Dh90).
- The transport Minibuses run along the Chuysky Trakt but if you want to stop for sightseeing, hire a taxi from Gorno-Altaisk for about US$100 (Dh360) a day. Take a Russian phrasebook or download a translation app. Tour companies such as Altair-Tour (+7 383 2125115 ) offer hiking and adventure packages.
Company profile
Name: Homie Portal LLC
Started: End of 2021
Founder: Abdulla Al Kamda
Based: Dubai
Sector: FinTech
Initial investment: Undisclosed
Current number of staff: 14
Investment stage: Launch
Investors: Self-funded
COMPANY PROFILE
Name: Kinetic 7
Started: 2018
Founder: Rick Parish
Based: Abu Dhabi, UAE
Industry: Clean cooking
Funding: $10 million
Investors: Self-funded
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
A QUIET PLACE
Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou
Director: Michael Sarnoski
Rating: 4/5
COMPANY PROFILE
Company name: Silkhaus
Started: 2021
Founders: Aahan Bhojani and Ashmin Varma
Based: Dubai, UAE
Industry: Property technology
Funding: $7.75 million
Investors: Nuwa Capital, VentureSouq, Nordstar, Global Founders Capital, Yuj Ventures and Whiteboard Capital
Kill
Director: Nikhil Nagesh Bhat
Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal
Rating: 4.5/5
Getting there and where to stay
Fly with Etihad Airways from Abu Dhabi to New York’s JFK. There's 11 flights a week and economy fares start at around Dh5,000.
Stay at The Mark Hotel on the city’s Upper East Side. Overnight stays start from $1395 per night.
Visit NYC Go, the official destination resource for New York City for all the latest events, activites and openings.
Director: Nag Ashwin
Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana
Rating: ★★★★
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
How to get there
Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
The specs
Engine: 1.8-litre 4-cyl turbo
Power: 190hp at 5,200rpm
Torque: 320Nm from 1,800-5,000rpm
Transmission: Seven-speed dual-clutch auto
Fuel consumption: 6.7L/100km
Price: From Dh111,195
On sale: Now
THE LOWDOWN
Photograph
Rating: 4/5
Produced by: Poetic License Motion Pictures; RSVP Movies
Director: Ritesh Batra
Cast: Nawazuddin Siddiqui, Sanya Malhotra, Farrukh Jaffar, Deepak Chauhan, Vijay Raaz
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Confirmed bouts (more to be added)
Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez
Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.
Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor