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FINANCE

Dec 27, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Pakistan, Sweden sign debt accord

Pakistan and Sweden on Monday formally signed a debt rescheduling agreement of 81 million US dollars as part of an overall relief package arranged by the Paris Club.

The accord was signed after negotiations held here last month between the two governments on the consolidation and rescheduling of debt owed by Pakistan to Sweden.

Under this agreement, debt service of 81 million dollars, due during the period from July 1,1998, to Dec 31, 2000, has been consolidated and rescheduled.

The repayments will be in 30 semi-annual instalments commencing from July 1, 2003.

The debt agreement is part of an overall relief package, arranged by the Paris Club for Pakistan in January this year, for rescheduling 3.3 billion dollars debt over a period of 20 years.

Meanwhile, a 2-member official delegation leaves for Paris on Tuesday morning to negotiate and sign $395 million debt accord with France, official sources said here on Monday.

Led by Secretary Economic Affairs Division, Javed Akram, the delegation will hold talks with French officials on December 22, and 23 to sign the $395m debt deal.

The debt agreements are part of an overall relief package, arranged by the Paris Club for Pakistan in January last, for rescheduling of $3.3 billion debt over a period of 20 years. Pakistan has already secured a debt relief of around $1.625 billion under the Paris Club arrangements.

The bilateral agreements, signed so far, included $926 million accord with USA, $255 million with Germany, $11.63 million with Norway, $81 million with Sweden, $22 million with Austria, $23 million with Spain, $4 million with Denmark, $30 million with Netherlands, $42 million (CIDA, $27 million, Canadian Wheat Board, $15 million) with Canada and $35 million with South Korea.

The debt rescheduling amount of $3.3 billion agreed with the Paris Club includes both the Official Development Assistance (ODA) as well as non-ODA loans.

PNSC lose

Pakistan National Shipping Corporation (PNSC) posted a loss of Rs. 116 million for the year 1998-99 due to difficult prevailing economic conditions in the country, PNSC officially announced on Tuesday.

Reserves fall by $66m

Foreign exchange reserves fell by $66m to $1.535bn on Dec 18 from $1.601bn on Dec 11.

The latest State Bank statement of forex reserves reveals that on Dec 18 approved forex reserves stood at $1.295bn whereas balances held abroad in foreign currencies and short term securities totalled $240m.

Senior bankers said the reserves fell as the State Bank began repaying 20% of the swap funds rolled over by the banks in '98 after Pakistan went nuclear.

SBP mops up Rs5bn

The State Bank on Thursday mopped up Rs 5.0bn from the inter-bank money market through outright sale of treasury bills.

Senior bankers said the SBP raised the amount at the maximum yield of 9.9%. They said SBP had received bids worth Rs 12.9bn for the T bills of which it accepted bids worth Rs 5bn and scrapped the remainder.

They said in the two-way OMO SBP also had received Rs 8.8bn worth of offers for two-week and one-month reverse repo but all the offers were rejected.

Govt refunds $60m to PARCO

The government has decided to refund $60 million to PARCO in duties and taxes which were deducted for the import of equipment for the $886 million mid-country refinery project.

According to a decision of the Economic Coordination Committee (ECC) of the Cabinet on December 13, the under construction PARCO's 4.5 million tons (100,000 BPD) refinery project has been fully exempted from payment of customs duty and sales tax.

PARCO, in a press release, said that the amount was deducted despite sovereign agreement.

The matter was under consideration for the last two years and was eroding country's credibility in honouring its contractual commitments.

PQA earn

The Port Qasim Authority's (PQA) operating income has surged by 11 per cent (Rs 53 million) to Rs 537 million during JulyNovember period this year as compared to Rs 484 million the same period last year.

New prize bonds worth Rs48.7 billion sold

The new prize bonds of six various denominations have attracted Rs 48.7 billion from general investors during Oct l-Dec 16 period.

According to Central Bank statistics, the Rs 15,000/denomination prize bonds have attracted Rs 12.2 billion when these were put on sale from October 1 to October 30.

The Rs 750 denomination bonds fetched Rs 4.5 billion during October 15 to November 14; the Rs 7,500 bonds worth Rs 11.7 billion were sold during Nov 1 to 30; while Rs 14.6 billion were attracted by Rs 1500 denomination bonds issued for sale during Nov 15 to Dec 14 period.

The SBP has fetched Rs 5.2 billion through the sale of Rs 40,000 denomination bonds issued in place of Rs 25,000 bonds from Dec 1. These bonds will continue to be sold till Dec 31.

The Rs 200 denomination bonds attracted Rs 517 million in two days (Dec 15-16). The bonds were issued for sale on Dec 15 and would continue till Jan 14. First draw of the new bonds will be that of Rs 15,000/- denomination bond which will be held on Jan 3 in Peshawar.

S&P raises Pak ratings

Standard & Poor's on Tueaday raised its long-term foreign currency sovereign credit rating of Pakistan to single-'B'minus from 'SD' (selective default), and its long-term local currency sovereign credit rating the country to single-'B'-plus from single-'B'.

Standard & Poor's also raised Pakistan's short-term foreign currency sovereign credit rating to single-'B' from 'SD', and affirmed its single-'B' short-term local currency rating and its single-'B'-minus long-term foreign currency senior unsecured debt rating. The outlook is stable.