Policy Rate Unchanged at 7PC - State Bank of Pakistan

 

The depository financial institution of Pakistan (SBP) announced on Friday that the Monetary Policy Committee (MPC) has decided to stay the rate of interest at 7 percent.

The decision was made during a gathering of the MPC held earlier within the day, wherein the committee noted that domestic recovery has gained some further traction since the last meeting in November.

“Most economic activity data and indicators of consumer and business sentiment have shown continued improvement,” the SBP said during a statement. “As a result, there are upside risks to the present growth projection of slightly above 2 percent in FY21,” the SBP.

It is the third time that the financial institution has kept its main policy rate unchanged after cutting it by 625 basis points, down from 13.25pc, at the time the worldwide pandemic hit its economy last February.

SBP Governor Reza Baqir, during a news conference after the committee’s meeting, said that within the “near future […] rate of interest will remain an equivalent and if, within the future, there's a change, it wouldn’t be like [in the past] when the rate of interest would see a sudden and drastic change. The change would be [introduced] in an orderly manner.”

In reference to inflation, recent out-turns are reportedly encouraging and suggest a waning of supply-side price pressures from food and still-benign core inflation. While utility tariff increases may cause an uptick in inflation, this is often likely to be transient given excess capacity within the economy and inflation expectations.

“The MPC’s inflation estimates are 7-9 percent,” he said but added a warning that a short-lived rise within the prices of food and beverages, also as electricity, were likely. 

Dr. Reza Baqir also noted that the assembly capacity wasn't being fully utilized. 

“The MPC has also given a direction to the longer term and therefore the SBP has provided guidance for the longer term also this point.

Inflation remains expected to fall within the aforementioned home in the present financial year and an extra trend toward the 5-7 percent firing range over the medium-term.

With this in mind, the MPC felt that the prevailing accommodative stance of monetary policy was appropriate to support the nascent recovery while keeping inflation expectations well-anchored and maintaining financial stability. 

On the opposite hand, the committee also stressed that there's still considerable uncertainty remains regarding this outlook. It acknowledged that the still-elevated global cases, the emergence of the latest strains, and lingering uncertainties about the roll-out of vaccines worldwide have made the trajectory of the Covid-19 pandemic is difficult to predict.

Such external shocks could slow the recovery, the MPC warned. However, within the absence of unforeseen developments, the MPC expects monetary policy settings to stay unchanged within the short-term.

“The [exchange] rate was at Rs162-163 and that we left it [to the free market], it became stable. [In] those nine months before Covid, it strengthened and decreased from Rs163 to Rs153-154. which suggests that the development within the accounting was due to an honest reason [which was] that the rate of exchange system was made more flexible,” Baqir said during the presser.

“It’s a basic advantage is that, in future, if there's a deficit within the balance of payments, rather than adding reserves and balancing it artificially, rate of exchange will play the role of a shock .”

Karachi-based Bazaar Technologies secures $6.5m in seed funding to digitise mom-and-pop stores

With recent funding, Bazaar plans to expand its footprint across Pakistan, build its product capabilities, and offer value-added services to customers

Bazaar, an eight-month-old business-to-business e-commerce marketplace that aims to digitize traditional retail in Pakistan, has raised $6.5 million in seed funding, bringing the entire raised by the startup to $7.8 million in two funding rounds.

 

The announcement from the startup comes to a couple of months after an earlier denial by the corporate that they were raising new investment in seed funding, after Profit published a report in August last year that Bazaar was seeking the maximum amount as $15 million in seed funding from investors.

 

A senior official from Bazaar’s management team had reached bent Profit after the publication of the aforementioned report, flatly denying that Bazaar was within the active process of raising its now disclosed seed round. Profit had then learned from sources that the startup had planned to stay the round undisclosed for a couple of months albeit the round was successful.

 

Bazaar’s $6.5 million seed round was co-led by Germany-based Global Founders Capital, and US-based Indus Valley Capital, which had led the startup’s previously pre-seed round. Other investors within the round included several renowned global investors like S7V, Wavemaker Partners, Derayah risk capital , and Next Billion Ventures, all of whom are making their first investments in Pakistan, consistent with a press release by Bazaar.

 

Existing investor Alter Global also participated within the seed round.

 

According to the startup, the recent round is one of the most important seed rounds raised by a startup within the Middle-East, North Africa, and Pakistan (MENAP) region. Bazaar had earlier raised $1.3 million in pre-seed funding in June last year.

 

Moreover, angel investors, including current and former leaders of Careem, a partner at DST Global, and founders of other prominent B2B startups including Maxab (Egypt), Ula (Indonesia), and Sokowatch (Africa) have also joined Bazaar’s board.

 

According to the startup, its mission is to digitize traditional retail in Pakistan. Using the country’s rising mobile adoption, Bazaar aims to empower the many SMEs that dominate the market by providing significant value and convenience through various digital products.

 

“We are excited to back an unprecedented team in their journey to assist many small shops in Pakistan digitize their retail business,” said Tito Costa, partner at Global Founders Capital.

 

As their first product, Bazaar has created a mobile-based B2B e-commerce marketplace that permits mom-and-pop grocery stores (called Kirana stores) to get directly from manufacturers, wholesalers, and suppliers. The Bazaar App provides kiryana owners an outsized assortment of branded and unbranded products, which may be ordered at any time, any day with free next-day delivery.

 

On one end of the marketplace, kiryana owners can enjoy Bazaar App’s convenient ordering, reliable delivery and competitive prices. Suppliers, on the opposite end, through Bazaar get a direct-to-retail channel and are provided actionable insights on purchase patterns and trends.

 

“When we invested in Bazaar in May, they set ambitious targets for 2020. They went on to crush those goals by 10x. Indus Valley Capital is thrilled to double down on Bazaar and strengthen our partnership to revolutionize the $150B retail industry in Pakistan,” said Aatif Awan, Managing Partner at Indus Valley Capital.

 

Bazaar was co-founded by Saad Jangda and Hamza Jawaid, whose personal mission is to compile and cultivate talent both in Pakistan and therefore the diaspora to ultimately create a platform that further enables entrepreneurship within the country. before Bazaar, Jangda was a product manager for ride-hailing and food delivery products at Careem, while Jawaid was an adviser at McKinsey & Company, based in Dubai.

 

“As the fifth largest country within the world with rising digital adoption, we have a fantastic opportunity to empower micro-businesses through technology. Over 80% of our customers own and operate smartphones, yet their way of running a business has not changed, until now. By bringing them online, we will meaningfully improve their business and their lives, freeing up time to specialize in the foremost important tasks, eventually enabling greater returns,” said Jawaid.

 

Within just eight months of launch, Bazaar claims to possess served over 10,000 retailers in Karachi and features a catalog of over 500 SKUs on its platform. during this short time, the corporate says they need managing to assemble a team of skillful individuals from a number of the highest local and global companies like Careem, Swvl, Kitopi, Daraz, and Unilever.

 

“At Bazaar, we believe that building the technology layer for traditional commerce may be a massive opportunity. With the sheer size of the Pakistani market, a replacement narrative and spotlight on our ecosystem , and an abundance of Pakistanis moving back home, we finally have all the proper fundamentals to create massive tech institutions. we've been blown away by our early team and humbled by the roster of investors who are supporting us on this journey. it's further validation of the sheer yet untapped potential of tech in our country,” said Jangda.

 

With this fresh round of funding, Bazaar plans to expand its footprint across Pakistan, build its product capabilities and deepen its relationship with customers by offering more value-added services.

FBR is Aiming To Lower the Cost of Doing Business

Muhammad Ashfaq Ahmad, Member of FBR Inland Revenue Operations said that the Federal Board of Revenue (FBR) prioritizes lowering the value of doing business for the 2021-22 budget by getting obviate unnecessary taxes and reducing enforcement costs.

During his visit to the Karachi Chamber of Commerce and Industry (KCCI) on Friday, chatting with businessmen, he said this move would set companies free in order that they need minimal contact with tax authorities and consider expanding business and industrial activities.

“FBR could also be a 30-35% stakeholder in whatever is earned in the shape of sales tax, tax, or withholding, hence it’s within the authority’s best interest to supply businesses a favorable environment and slash their cost,” he said.

He added that the FBR receives thousands of budget proposals once a year but hardly gets time to travel through all of them.

He emphasized that the FBR would make all-out efforts to implement a maximum number of practical recommendations.

Keeping this in view, he requested the Karachi Chamber and each one other business chambers to directly present budget proposals to the technical committee formed by the minister of finance, get them refined and forward practical recommendations to the FBR.

According to figures released by the depository financial organization of Pakistan, the offtake of capital has declined because of improved performance of the FASTER system in processing sales tax refund claims quickly.

“We are competing with the depository financial organization of Pakistan during a positive contest,” he said. “We dispatch refunds so as that businessmen don’t get to borrow capital from banks because it jacks up their cost.”

He revealed that the FASTER system was running with zero balance and consumed on the typical 40-50 hours to process a refund claim.

“It is functioning with 95.5% efficiency which indicates that the sales tax refund system is outstanding,” he said. 

“The old refund claims remain stuck but instructions are issued during this regard and taxpayers should request field formations to urge their old claims processed, which may be done on priority through the FASTER the system,” he said.

Referring to tax litigation, he said that an enormous amount of revenue remained blocked for the FBR and if it succeeds in recovering just 20% of it, then revenue target would be met and thus the country wouldn't get to approach the IMF to request a cut in it.

Speaking on the occasion, Businessmen Group Chairman Zubair Motiwala urged the FBR to disclose its priorities for budget measures so as that the KCCI and other trade associations could forward a precise budget proposals in accordance with them.

“Small businesses face serious income problems which they don’t have access to banking channels,” he said while expressing concern.

Appreciating the performance of the FASTER system, he urged the FBR to also concentrate on the small and medium enterprises whose tax refunds remained stuck.

Neuralink: Elon Musk unveils pig with chip in its brain

Elon Musk has unveiled a pig called Gertrude with a coin-sized computer chip in her brain to demonstrate his ambitious plans to create a working brain-to-machine interface.

His start-up Neuralink applied to launch human trials last year.

The interface could allow people with neurological conditions to regulate phones or computers with their mind.

Mr Musk argues such chips could eventually be wont to help cure conditions like dementia, paralysis agitans and medulla spinalis injuries.

But the long-term ambition is to inaugurate an age of what Mr Musk calls "superhuman cognition", partially to combat AI so powerful he says it could destroy the humanity .

Gertrude was one among three pigs in pens that took part in Friday's webcast demo. She took a short time to urge going, but when she ate and sniffed straw, the activity showed abreast of a graph tracking her neural activity. She then mostly ignored all the eye round her .

The processor in her brain sends wireless signals, indicating neural activity in her snout when trying to find food.

Mr. Musk said the first Neuralink device, revealed just over a year ago, had been simplified and made smaller.

"It actually fits quite nicely in your skull. It might be under your hair and you would not know."

Founded in 2017, Neuralink has worked hard to recruit scientists, something Mr. Musk was still advertising for on Twitter last month and which he said was the aim of Friday's demo.

The device the corporate is developing consists of a small probe containing quite 3,000 electrodes attached to flexible threads thinner than human hair, which may monitor the activity of 1,000 brain neurons.

Ahead of the webcast, Ari Benjamin, at the University of Pennsylvania's Kording Lab, had told BBC News the important stumbling block for the technology could be the sheer complexity of the human brain.

"Once they need the recordings, Neuralink will got to decode them and can someday hit the barrier that's our lack of basic understanding of how the brain works, regardless of what percentage neurons they record from.

"Decoding goals and movement plans is tough once you don't understand the neural code during which those things are communicated."

Mr Musk's companies SpaceX and Tesla have captured the general public imagination together with his attempts to drive progress in spaceflight and electric vehicles respectively.

But both also demonstrate the entrepreneur's habit of making bold declarations about projects that end up taking much longer to complete than planned.