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Aug 07 - 13, 2000

Asian Bank to provide $150m loan

A high-level meeting chaired by Chief Executive Gen Pervez Musharraf on Monday was told that the Asian Development Bank (ADB) was expected to offer $150m for micro finance sector including the recently established Micro Finance Bank (MFB).

"The government has provided Rs one billion equity for the MFB while $150m were likely to be extended by the ADB for the micro finance sector as well as for the Bank", said Additional Secretary and the Spokesman of Ministry of Finance, Dr Waqar Masood Khan.

He told the meeting was informed that the MFB will be the most important instrument for the poverty reduction strategy. He said that the ADB was also expected to provide technically assistance to remove poverty from the country.

Chief Executive appreciated the efforts put in by all concerned to conceive and implement a strategy aimed at assisting the poor becoming masters of their own destiny. He said the government was committed to the implementation of a policy supported by concrete financial measures, so that any poor person prepared to work for his own betterment and uplift does not face problems of raising or arranging capital and credit. He said the key to the success of the MFB was selection of persons on merit who were prepared to devote time and energy for the betterment of the people and not simply job seekers.

The chief executive directed the participants, including the Finance Minister, Shaukat Aziz, Secretary General finance, Moeen Afzal and senior officials of the Micro-Credit Bank to focus on the less developed areas and take steps to encourage spirit of participation among the people who would benefit from the scheme. He said the Micro-Credit Bank was not merely a bank by another name but an important partner of the people in projects for their uplift and wellbeing.

Alternative to IMF loans ready: SBP chief

State Bank on Tuesday said it had prepared an alternative plan if the International Monetary Fund (IMF) refuses to approve loans following a crucial post-budget review.

"If we cannot make a deal with the IMF, we have prepared an alternative to cope with the situation," State Bank Governor Ishrat Husain told, without elaborating on the details of the plan.

"We are not going to disclose our alternative plan till finalizing the talks with the IMF," he said.

Pakistan hopes to get up to 2.5 billion dollars in loans from the IMF to help pay off massive debt servicing bill.

Pakistan needs about six billion dollars to cover interest on its debts due in 2001 but its forex reserves are hovering around 1.1 billion dollars.

FDI posts $15m growth

The inflow of Foreign Direct Investment recorded a notable increase of $15 million during the last month of the fiscal 1999-2000 when compared with the preceding month.

The country received a total of $46.2 million of FDI during June 1999-2000 as against $31.2 million of FDI inflow during May 1999-2000, according to the SBP sources. The country received a total private investment of $543.4 million during the fiscal 1999-2000 as the FDI drew a lion's share of $469.9 million. The portfolio investment during this period was to the tune of $73.5 million.

The FDI of $169 million from the United Kingdom topped the investment inflow during the last fiscal followed by the United States with $166.9 million. The other notable FDI inflows included $28.6 million from Saudi Arabia, $17.7 million from Japan, $10.7 million from Netherlands, $10.5 million from Germany, $9.3 million from Korea, $5.7 million from UAE and $1.6 million from France.

Dollar down

The US dollar has shed 40 paisa to a rupee in the inter-bank market in past one week — mainly due to increased inflow of export proceeds. On July 27 the greenback had risen to Rs53.65 forcing the State Bank to intervene in the market. On Aug 3 it slipped to Rs53.25 after testing different levels within six working days.

In a sharp contrast to this the dollar gained 10 paisa in the kerb market during this period: it rose from Rs55.80 on July 27 to Rs55.90 on Aug 3.

Gold prices move up

Prices of gold have risen sharply in Karachi and Lahore respectively after the removal of the cap on inter-bank exchange rates on July 20.

On 20th July 24 caret gold was selling for Rs4980 per 10 gm in Karachi and for Rs5040 in Lahore: on Aug 2 the rates rose to Rs5050 and Rs5075 respectively.

ICI Pakistan

ICI Pakistan Limited swung back to an operating profit of Rs408.4 million in the first six months (Jan-June 2000), from an operating loss of Rs966.1 million in the corresponding period of the previous year.

SBP cuts yield

The State Bank on Monday announced slashing of 15-20 basis points in the rates of return it would offer on foreign currency deposits of banks in August. The SBP said it would give 4.60 and 4.30 per cent return on three-month and one-month deposits instead of 4.80 and 4.50 per cent respectively. It said one-week deposits would attract 4.10 per cent return instead of 4.25 per cent.

Badla rates edge up

After remaining pegged at 12.6 per cent in the preceding two weeks, the average 'badla' rates on the carry forward business at Karachi stock market, edged higher to 13.3 per cent for the week that closed on Friday July 28.

CDC cuts charges

The Board of Directors of Central Depository Company of Pakistan Ltd has drastically reduced the charges from 25 to 100% for investors, issuers and participants to provide relief to customers and to stimulate business activity in capital market.

According to the revised rates for Investor Account Services, annual fee has been reduced from Rs3000 to Rs1000 (66.66 %) for individual and from Rs5000 to Rs2000 (60 %) for other than individual.

US firm invests $10m

An American firm has introduced e-commerce network in Pakistan with an initial investment of $10m in alliance with a Pakistani company.