Aug 28 -
Sep 03, 2000
External debt reaches $29.52 billion, says report
Pakistan's external debt on May 31, amounted to $29.520
billion of which $23.611 billion was long-term and $1.484 billion short term,
says a report on the economic situation sent by Pakistan to the international
donors this week.
The foreign exchange reserves stood at $1.352 billion at the
end of June, against $1.729 billion on June 30, 1999, showing a decrease of 21.8
per cent. The exchange rate (Pak rupee-dollar Interbank) for June averaged
Rs52.05, showing a depreciation of 0.7 per cent over the exchange rate of
Rs51.70 in June 1999. Foreign currency account situation is reflected by the
fact that $68.7 million were converted into rupee and special dollar bonds from
frozen FCA in May. Of this, the conversion in rupee amounted to $42.3 million
(61.6 per cent) and $26.4 million were converted into special dollar bonds (38.4
The balance under FCA scheme is constantly decreasing. In
May, the balance amounted to $3.055 million, of which the resident accounts were
$1.374 billion (45 per cent) and the remaining 55 per cent belonged to
Workers' remittances during 1999-2000 amounted to $983.7
million against $1.060 billion in the previous year, indicating decline of 7.2
It says that the current account deficit during July-April
1999-2000 narrowed by 36.1 per cent to $1240 million over the level of $1940
million of the comparable period last year. This was caused by a reduction in
trade deficit (FOB) and substantial rise (42.9 per cent) in private transfers.
Foreign private investment during June-July 1999-2000
amounted to $543.4 million as against $449.6 million last year, showing an
increase of 8.8 per cent. Of this, foreign direct investment has declined by 0.5
per cent (from $472.3 million to $464 million) and portfolio investment
registered an inflow of $73.5 million. Almost 87 per cent FDI came in the power,
oil and gas, chemical, pharmaceutical and fertilizer, construction, food and
beverage, transport, storage and communication.
$418m pacts signed with IDB
Pakistan on Thursday signed a $385 million financing
agreement with the Islamic Development Bank for purchasing oil, an official
At present, Pakistan is spending almost $200 million a month
for the purpose.
The agreement, signed by Finance Minister Shaukat Aziz and
IDB president Dr Ahmad Mohamed Ali, will ostensibly ease pressure on the
depleting foreign exchange reserves which, according to the State Bank, stand at
$1.1 billion. The reserves include $452 million of foreign currency deposits.
The interest rate on the loan will be 1.05 per cent over the
London inter-bank offering rates.
Non-performing loans rise
An increase of 23.2% has been recorded in non-performing
loans (NPLs) during 1999-2000, as against the NPLs awarded to private sector in
1998-99, says a report sent by Pakistan to the international donors last
Review of the Economy (1999-2000), submitted to the IMF by
the ministry of finance indicates that the NPLs stood at Rs193.2 billion in May
1999, whereas, the amount swelled to Rs238.1 billion by May 2000. The defaulted
loans amounted to Rs145 billion in May 1999, which increased to Rs143 billion by
May 2000, showing an increase of Rs2.3 billion.
Yield on 1-year TBs rises
The government on Wednesday borrowed Rs1.6 billion from the
banking system through sale of treasury bills. The State Bank conducted the sale
on behalf of the government.
SBP said it sold Rs500 million worth of six-month T-bills at
a maximum yield of 7.38 per cent and Rs1.1 billion worth of bills at 8.09 per
The sale of T-bills had attracted total bids worth Rs8.5
billion of which SBP accepted bills worth Rs1.6 billion and scrapped the rest.
Conversion of frozen FCDs picks up
The constant rise of the dollar in the inter-bank market
after the July 20 free float of the rupee has led to faster conversion of frozen
foreign currency deposits into rupees and dollar bonds.
Senior bankers said people converted $50m worth of FCDs
within one month between July 20 and Aug 21. They said up to July 20 $6.27bn
worth of FCDs stood converted into rupees and $1.87bn into dollar bonds. On Aug
21 the two figures rose to $6.31bn and $1.88bn.
Investment projects approved
The Cabinet Committee on Investment (CCI) met on Monday with
Finance Minister Shaukat Aziz in the chair and approved various investment
projects worth $85 million.
Commerce Minister Razak Dawood stated that this was in
addition to the investment of $500 million under way in the textile sector,
which would modernize the sector to produce high value-added products to meet
the challenges of the international market. This would also create jobs and
promote exports, he added.
The meeting reviewed progress on the implementation of 16
investment projects worth $210 million and noted with satisfaction that
trans-national corporations like Sony, Cupola, Daihatsu, Hyundai, McDonald and
Nike had plans to increase their investment in Pakistan.
Askari General Insurance
Askari General Insurance Company Limited posted 20 per cent
improvement over the earlier year, in pretax profit to Rs15.8m and 42 per cent
surge in retained premium to Rs88.1m.
FFC-Jordan Fertilizer Co posted pretax loss in the whopping
sum of Rs 2,302 million for the six months to end-June, on net sales valued at
Rs 1,494 million. After provision of Rs 7 million in taxation, the post taxed
loss stood at Rs 2,310 million.
Engro, the pretax profit dipped 81 per cent to Rs94.7 million
for the Jan-June 2000, from Rs504.4 million in the comparable period of the
earlier year. After tax profit stood at Rs72.8 million from Rs385.4 million.
Paid-up capital raised
The newly promulgated insurance law has made it mandatory on
every company, associated with life insurance company, to raise its paid-up
capital to Rs150 million, wherein for a company with a non-life insurance
business, the same has been fixed at Rs80 million.