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Reserves fall to $1.68bn

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The foreign exchange reserves of Pakistan fell to $1.680 billion on June 19 from $1.708 billion on June 12 a decline of $28 million in one week.

The State Bank statistics on forex reserves released here on Thursday show that Pakistan had $1.519 billion worth of the approved reserves on June 19 down from $1.565 billion on June 12. The statistics reveal that foreign exchange balances held abroad in cash and short term securities totalled $161 million on June 19 up from $143 million on June 12.


National judicial body to be set up for acquiring $80m loan

Pakistan will have to set up a national judicial authority for policy-making and install a judicial ombudsman in order to be eligible for $ 80 million legal and judicial reforms soft loan from Asian Development Bank and other donors.

Informed sources told that after two years of ground work in the light of the feasibility studies, four bulky reports of consultants, and meetings with the Law Ministry, provincial governments, High Court and Supreme Court judges, and bar associations, an aide memoire will be presented at a wrap-up meeting here on Friday.


Farm IT target set at Rs845m

The Sindh Government has set a collection target of Rs 845m under Agriculture Income Tax (AIT) for the next fiscal year in the province.

This was announced by Advisor to Prime Minister on Sindh Affairs Syed Ghous Ali Shah while presenting Sindh Budget '99-2000 at a press conference Wednesday.

He said Rs 200 million was collected under AIT from the province during 1998-1999 against the target of Rs 600.


Fresh checks on inter-bank forex deals

In what is being seen as a big surprise the State Bank has stopped the banks from buying or selling foreign currencies between themselves if the buy or sale is not backed by commercial deals with their customers.

The State Bank on Tuesday issued a circular (F.E. no 15) which refrained all the banks from buying or selling foreign currencies unless the purchase or sale is backed by commercial transaction.

It also stopped the banks from making forward buying or selling of foreign currencies for less than one month.

The circular said even the one-month forward transactions with the customers would be for fixed maturity meaning thereby that the banks would not be able to closeout the deal earlier or extend it beyond one month.

These restrictions have been imposed through amendments in the SBP instructions on foreign exchange transactions conveyed to the banks through another circular (F.E. no 8) issued on May 18,1999.

"We are surprised...we had never expected such a thing," said a local banker. Some other bankers said the same thing.

The circular says: "In case payment is made/received within one month spot selling/buying rate will be applied and the relevant contract will be closed out at the maturity date."

It further says that banks may freely buy foreign currencies from and sell them to other banks in Pakistan "provided such purchases or sales are backed by permissible transactions with their customers." Previously the banks could do it on their own.

The SBP circular came minutes after a brain-storming session between senior bankers and SBP officials wherein bankers urged the SBP officials to stop imposing an artificial exchange rate band.

Sources privy to the meeting said treasury managers of both local as well as foreign banks told the SBP officials that the practice would lead to severe distortions not only in exchange rate regime but in overall economy.


WorldTel to invest $500m in TeleCard

The WorldTel, acting as a strategic investor, will invest Rs500 million as equity in TeleCard Ltd to finance its wireless payphone expansion programme, an announcement said on Tuesday.

"The massive wireless payphone expansion now contemplated will require an immediate injection of fresh equity," announcement said.

The company plans to issue further capital to the strategic foreign investor without a right issue to the existing shareholders of the company.


Rupee loses 37 paisa

The Rupee has lost 37 paisas against US dollar in the open market during the last 20 days due to persistent demand for the green bill, dealers said.

The buying and selling rate for dollar was quoted at 53.47/53.50 at the close of the day on Monday in the kerb market as compared to $3.10/53.13 on June 3 and 51.55/ 51.60 on May 3.


$15m PL-480 funds to be diverted for wheat import

Pakistan will import wheat instead of soyabean seed from America under $15 million credit under its PL480 programme during 1999-2000 following the reports of short wheat crop this year, sources said here.

Official sources revealed that Agriculture Attache Jim Dever of USA embassy in Islamabad has formally informed government of Pakistan that US Department of Agriculture (USDA) has agreed to divert its $15 million loan for wheat import.

Sources in the ministry of finance said USA had offered Pakistan to provide soyabean seed worth $15 million to make the local solvent industry run according to its full capacity.