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Indian rupee plunges to record low against US dollar

MUMBAI (AFP): The Indian rupee hit a record low of 70 to the dollar on Tuesday as emerging market currencies are sold off by investors spooked by the Turkish financial crisis.

The under-pressure rupee touched 70.09 briefly during mid-morning trade as fears grow that the plight of Turkey´s lira will spread to other emerging countries.

South Africa, Argentina, Mexico, Brazil and Russia have all seen their currencies slip over the past week because, like Turkey, they remain heavily dependent on foreign capital, especially the dollar.

The rupee has been on a downward spiral throughout 2018 after starting the year at 63.67.

India is a massive net importer of oil, securing more than two-thirds of its needs from abroad.

Analysts say the high crude prices are squeezing the Indian currency, making it less appealing to investors.

The fall in the rupee is leading to a widening of India´s current account deficit, when the value of imports exceeds the value of exports, they say.

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Businessmen demand ban on luxuries items import

F.P. Report

LAHORE: Senior Vice President SAARC Chamber of Commerce and Industry and central chairman United Business Group (UBG) Iftikhar Ali Malik Monday asked Prime Minister designate Imran Khan to slap a complete ban on import of luxury items to protect foreign exchange reserves which will also promote local industry and generate employment and be Pakistani buy Pakistani.

Addressing a meeting of traders in connection with Independence Day here in the provincial capital, he said independence was attained after offering colossal sacrifices offered by our elders and there is no substitute in the world for freedom so we all should play our vital role making Pakistan an economic giant and citadel of Islam to make it corruption free welfare Islamic state in the comity of nation.

Iftikhar Ali Malik said that authorities can consider a ban on imports like many other countries including Iran, Nigeria, and Egypt have experienced the same. “Pakistan is importing eighty thousand luxury cars and thousands of costly motorcycles and countless other items even fruits and vegetables worth billions of dollars annually which must be banned,” he added.

The SVP SAARC Chamber of Commerce and Industry said that Pakistan needs seven to eight percent transformational growth in next ten years to mobilize the resources for social uplift of backward areas of the country and create jobs for growing youth population. The import bill reached record $60.86bn in 2017-18 from $52.9bn in the previous year, reflecting an increase of 15 per cent. Yet the country’s trade deficit reached a historic $37.6bn in 2017-18 from $32.5bn in the previous year.

Iftikhar Malik said that increasing regulatory duty on imports or banning imports could only work when smuggling is controlled otherwise all such efforts remain counterproductive.

He said that government should inform the masses about the benefits of the trade deals with partner countries before signing new deals. Giving suggestions to promote exports, he also said Pakistani brands have a potential to meet international consumers’ needs which only requires adequate promotional strategy to reach the targeted foreign audience and UBG will play its role to promote made in Pakistan products with cooperation of the coming PTI government at both local and international level with this mission motto, “be Pakistan and buy Pakistani products”.

He said stable economy is prerequisite for the survival of the country and promotion of democracy. He is much optimistic that the coming PTI government would take private sector into confidence for implementation of business friendly policies. He said if the PTI government properly utilizes the talents of the youth, he would be optimistic that Pakistan can be among top 10 economies by the end of 2040.

He said that unabated imports have taken a toll on the local industry while many industries are fighting for their survival including the soap industry providing jobs to over two hundred thousand people and providing Rs17 billion in the revenue.

Iftikhar Malik hoped that a strong political will under Imran’s leadership can lead to economic growth and poverty elimination in the SAARC region besides integration of the intra-trade, travel and tourism.

He said last year, the State Bank of Pakistan had also announced 100pc cash margin restrictions on the import of 131 items to discourage import of non-essential items.

The SVP SAARC Chamber of Commerce and Industry said that agro based industry has vast potential to be fully exploited besides rapid industrialization can bring green revolution to steer the country out of financial crunch.

He said prudent economic policies will definitely pay dividends. He said UBG will support all growth oriented business friendly policies provided private sector was taken into confidence prior to framing such policies.

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Turkey’s tourism rises 30 percent on yearly basis

Monitoring Desk

ISTANBUL: Turkey’s tourism rose 30 percent on the yearly basis and the country could gain $32 billion foreign currency inflows by the end of the year, according to Turkey’s top tourism association.

“If nothing serious or negative happens, we expect 40 million tourists by the end of 2018,” Firuz Baglikaya, head of Association of Turkish Travel Agencies (TURSAB), told Anadolu Agency’s Finance Desk.

Baglikaya also said they have targeted eliminating half of the country’s current account deficit in the coming year. “We have a contribution target for the tourism to reduce the current account deficit by around 50 percent in the coming year,” he said.

Noting that the tourism is among the most contributing sectors in lowering the current account deficit, Baglikaya added that the sector contributed $21 billion for reduction of the current account deficit last year.

He said the association has welcomed the 100-day action plan of the government, especially the parts pertaining to China. President Recep Tayyip Erdogan earlier in August unveiled first 100-day action plan of Turkey’s new presidential cabinet in the capital Ankara.

The president said over 1,000 projects will be completed within 100 days but announced most important are 400 in the program.

Mentioning that China declared 2018 the Year of Turkish Tourism, Baglikaya said the number of Chinese tourists visiting Turkey jumped 97 percent in the first seven months of this year, compared to the same period in 2017. Highlighting the importance of Chinese market, Baglikaya said China sends the highest number of tourists abroad.

“We will use our efforts to increase the number of Chinese tourists to 2 million in the coming years,” he said.

He also added that they plan to end the year with 500,000 Chinese tourists visiting Turkey. AA

 

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SBP revise instructions relating to advance payment facility

F.P. Report

KARACHI: Recently, the State Bank had revised the instructions relating to advance payment facility allowed to importers through Authorized Dealers and had also restricted the import on open account basis to manufacturing and industrial users for import of spare parts/raw materials only.

In view of representations made by a number of stakeholders, it has been decided that the restrictions earlier imposed on advance payment against imports shall not apply on letters of credit (containing clause regarding advance payment) established on or before July 14, 2018.

Further, the conditions regarding issuance of shipping documents on or before July 20, 2018 and filing of Goods Declaration with Pakistan Customs by August 10, 2018 shall not apply in cases where consignments had gated-in/entered the ports of shipment on or before July 20, 2018.

The State Bank has accordingly advised the Authorized Dealers through EPD Circular Letter No. 12 dated August 13, 2018.

 

 

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Silkbank declares Rs.1.729b operating profit for half year

F.P. Report

KARACHI: The Board of Directors of Silkbank Limited in their meeting held on August 13, 2018 declared an Operating Profit of Rs. 1.729 billion, with Profit after tax of Rs.746 million for the half year ended June 30, 2018, reflecting a significant increase of 75% over the same period last year.

Net interest income grew by Rs.711 million for the half year ended June 30, 2018 reflecting a growth of 27% over the corresponding period last year. Non-funded Income (NFI) for the half year showed a growth of 32% over the same period last year.

Gross advances have shown a growth of Rs. 8.19 billion, higher by 9% versus December 2017.

Deposits substantially increased by Rs. 15.1 billion or 13.7% growth over December 2017, taking the total deposit base to Rs.125.36 billion.

The robust deposit growth reflects increased customer confidence in the Bank. CASA ratio improved from 61.46% in December 2017 to 63.83% in June 2018, which contributed towards reduced cost of funds and higher profitability.

 

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Khushhalibank celebrates 18 years of Microfinance excellence

F.P. Report

ISLAMABAD: Pakistan’s largest microfinance bank, Khushhali Microfinance Bank (KMBL) celebrated its 18th anniversary. Inaugurated in 2000, Khushhali Microfinance Bank operates through a network of 158 branches and 28 service centers across Pakistan. Having serviced over 6 million loans to date, Khushhalibank takes pride in its legacy of providing access to finance to marginalized segment of the population, males and females alike, to invest in microenterprises for a better future and realize their economic potential.

To continue improving lives and contributing towards financial Inclusion in Pakistan, Khushhalibank is now Investing in digitizing its financial services to further expand the scope of its services. For 18 years, KMBL has enabled easy access to working capital requirements for farmers, self-employed individuals, and home-based workers. The bank also provides free of cost effective trainings in creating financial literacy by incentivizing positive credit behavior through access to better borrowing terms.

Talking on the occasion, Ghalib Nishtar, President, Khushhali Microfinance Bank, said: “Our vision is to be a premiere Microfinance Institution in Pakistan. We are committed to provide a full array of superior products and services through our expert bankers and set a precedent of providing microfinance banking being the first licensed bank in Pakistan.”

“We’ve also outlined the three “Ps” of digital success – product, people, and process. As the banking sector becomes increasingly competitive, with tech giants and fintech innovators challenging the established institutions, maximizing efficiency is becoming even more important.” he further added.

To mark its 18th anniversary, Khushhalibank carried out a ‘Plant Khushhali’ campaign across all its branches nationwide. Every employee participated by planting a tree sapling. More than 4,500 saplings were planted by the KMBL family to commemorate the anniversary. The campaign also symbolizes the bank’s holistic commitment towards the country’s development that goes beyond the provision of its banking services.

As of June 30, 2018, Khushhalibank has nearly 2.0 million active depositors, and more than 700,000 active borrowers, making it the largest microfinance bank in Pakistan.

 

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Fauji Cement Company continues tree plantation drive

F.P. Report

ISLAMABAD: Over the last one year, Fauji Cement Company Limited has undertaken massive Tree Plantation around the plant. Approximately ten thousand fruit and other trees were planted. Besides, almost same number of trees were distributed to adjacent villages. This effort has made the environment around the plant evermore green and clean.​
This year, FCCL management decided to utilize 14th August as Tree Plantation Day involving School Children, Locals and Factory Workers. Over 6,000 trees of various types will be planted through a well-organized campaign. MD / CEO FCCL, Lt. Gen. Muhammad Ahsan Mahmood, HI (M) (Retd) personally participated in the event.​
Cleaner and Greener Pakistan drive is bound to reduce the adverse weather effects and accordingly inspired the employees and the locals to take part in it. Trees remain a critical segment of our environment and rightly known as the lungs of the planet. We remain conscious that one tree contributes the cooling effect of approximately 1000 BTUS and accordingly FCCL on this 14th august is planting over 5,000 trees for the love of earth.

 

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Britain’s GDP increase outpaces eurozone in second quarter  

LONDON (AFP): Britain’s economy picked up speed to outpace the eurozone in the second quarter despite mounting concerns over Brexit, official data showed on Friday, helped partly by sunny weather and the World Cup football tournament.

Gross domestic product — the value of all goods and services produced in an economy — grew 0.4 per cent in the three months to the end of June, the Office for National Statistics (ONS) said in a statement. That was in line with market expectations, Britain, which is scheduled to leave the European Union next March, saw its economic activity outpace the eurozone which grew 0.3pc in the same period.

Retail sales and construction in Britain were boosted by warm weather.

The economy meanwhile appeared to shrug off a string of company collapses on the high street, including budget chain Poundworld and electrical retailer Maplin.

World Cup revellers sent the cash tills ringing as manager Gareth Southgate’s England team progressed to the semi-finals at the tournament held in Russia.

“The pick-up in quarter two reflects, to some extent, consumers taking advantage of the warm weather and World Cup celebrations,” the ONS said on Friday.

However, it also sounded a cautious note amid ongoing Brexit uncertainty – and stuttering trade talks between London and Brussels.

“Abstracting from these quarterly movements, the underlying trend in real GDP is one of slowing growth,” the ONS warned.

The UK growth rate nevertheless marked an acceleration from 0.2-pc expansion in the first quarter, when GDP slid on frosty weather and heavy snowfall from the so-called Beast from the East.

“The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year,” said Rob Kent-Smith, ONS head of national accounts.

“However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards.”

Friday’s news came one week after the Bank of England raised British interest rates by a quarter-point to 0.75pc to help tame high inflation – and upgraded its 2019 economic growth forecast despite investor fears of a chaotic no-deal Brexit.

The BoE also maintained its 2018 economic outlook, describing a first quarter slowdown as “temporary” with momentum set to recover in the second quarter despite widespread trade-linked worries over the global economy.

 

 

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Trump backs Harley Davidson’s boycott  over steel tariff dispute

Monitoring Desk

WASHINGTON: President Donald Trump backed boycotting American motorcycle manufacturer Harley Davidson Inc on Sunday, the latest salvo in a dispute between the company and Trump over tariffs on steel.

The Wisconsin-based motorcycle manufacturer announced a plan earlier this year to move production of motorcycles for the European Union from the United States to its overseas facilities to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminum imports.

In response, Trump has criticized Harley Davidson, calling for higher, targeted taxes and threatening to lure foreign producers to the United States to increase competition.

Harley Davidson has repeatedly declined to comment on Trump’s remarks over the course of the dispute. The company could not be immediately reached for comment on Sunday.

Harley has forecast that the EU tariffs would cost the company about $30 million to $45 million for the remainder of 2018 and $90 million to $100 million on a full-year basis.

Trump met Saturday with a group of bikers who support him, posing for pictures with about 180 bikers at his golf resort in Bedminster, New Jersey, where he is on vacation.

Motorcycle companies based outside the United States include Japan’s Honda Motor Co Ltd and Yamaha Corp, Europe’s BMW  and Ducati as well as India’s Hero MotoCorp Ltd, Bajaj Auto Ltd, among others.

 

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‘Trump’s tariffs, sanctions destroy jobs and growth’

BERLIN (Reuters): German Economy Minister Peter Altmaier has sharply criticized US President Donald Trump’s tariffs and sanctions policies, saying such measures were destroying jobs and growth and that Europe would not bow to US pressure regarding Iran.

The United States has triggered a bitter tit-for-tat trade dispute with import tariffs meant to protect American jobs against what Trump calls unfair trade practices from China, Europe and other countries. Trump’s determination to push ahead with sanctions on Tehran which also target European companies doing business with Iran has opened another battle front.

“This trade war is slowing down and destroying economic growth – and it creates new uncertainties,” Altmaier told Bild am Sonntag newspaper, adding that consumers suffered the most because higher tariffs were driving up prices. Altmaier lauded the agreement reached by European Commission President Jean-Claude Juncker during negotiations with Trump last month, saying the interim deal had saved hundreds of thousands of jobs in Europe.

The US and the European Union are embroiled in a spat after Trump imposed tariffs on aluminum and steel imports and Brussels responded with retaliatory tariffs on some US goods. Trump had also threatened to impose tariffs on EU auto imports but reached an agreement to hold off on taking action after meeting with Juncker at the White House last month.

“The agreement between the EU and US can only be a first step. Our goal is a global trade order with lower tariffs, less protectionism and open markets,” Altmaier said. Turning to the US sanctions against Iran, the minister said Germany and its EU allies would continue to support companies doing business with Iran despite US pressure.

“We won’t let Washington dictate us with whom we can do business and we therefore stick to the Vienna Nuclear Agreement so that Iran cannot build atomic weapons,” Altmaier said. German companies should be allowed to continue to invest in Iran as much as they want and the German government is looking for ways together with its European allies to ensure that financial transactions could still take place, he added.

Several European companies have suspended plans to invest in Iran in light of the US sanctions, including oil major Total (TOTF.PA) as well as carmakers PSA (PEUP.PA), Renault (RENA.PA) and Daimler (DAIGn.DE). German business associations have warned that companies are increasingly suffering from Trump’s sanctions policies – including those against Iran – as well as the tariffs he is imposing in the escalating trade conflict with China. The trade and sanctions disputes are clouding the growth outlook for Germany, Europe’s largest economy, but Altmaier said he nonetheless expected strong growth this year due to vibrant domestic demand, record-high employment and rising wages.