Sep 18 -
reviews budget targets, real economy
The World Bank and the IMF are expected to jointly
offer $1.35 billion medium-term programme to Pakistan to help improve
its balance of payments position.
Sources told on Tuesday that the World Bank had
joined the IMF for talks with Pakistan on a number of important
issues, including assessment of the possibility of jointly extending
1.35 billion dollar medium-term programme.
Talks between the two sides continued on Tuesday.
The Secretary-General, Ministry of Finance, Moeen Afzal, led the
Pakistan team while Ms Sena Ekin led the IMF review mission. Although
the mission was reviewing budgetary targets set for 2000-2001, there
were indications that Pakistan was likely to be offered around one
billion dollar standby arrangement (SBA) by the IMF on a 6 per cent
mark-up. And the World Bank would approve 350 million dollar
structural adjustment loan (SAL).
The sources said Pakistan had been given to
understand that, under the present circumstances, Fund officials might
not be able to offer the much-sought- after 2 to 2.50 billion dollar
poverty reduction growth facility (PRGF). They said that Pakistan
needed to settle some political issues with G-8 countries, specially
on CTBT and Kashmir; and that once some broad understanding was
reached, specially with the United States, this medium- term 1.35
billion dollar programme could be converted into PRFG.
The discussions focused on monetary sectors,
balance of payments and real economy. "What are our reserves at
present, what is the current money supply position and what is our
interest rate policy — are the issues which came under discussion
today", said a senior official of the ministry of finance.
Prices of sugar are unlikely to come down from Rs
27 per kg at retail level in the current month as only three ships are
expected to arrive in the remaining 15 days.
increases furnace oil price
Caltex Pakistan has increased the furnace oil price
by Rs 691.18 per metric ton to Rs 11,363 per metric ton from Rs
10,671.72 per metric ton.
The official attributed the price flare up to the
price rise in furnace oil by the Pakistan Refinery Ltd on Monday.
Caltex gets its furnace oil supplies from the local
refinery while another oil marketing company (OMC) — Shell Pakistan
also depends on supplies from local refineries.
The clients of Shell Pakistan Limited (SPL) will
now pay Rs516.35 per metric ton more from Tuesday to buy furnace oil
at the rate of Rs 11,120.50 per metric ton (inclusive of sales tax).
Market sources said the state-run PSO, which
manages its stocks from imports by issuing tenders and buys some
quantity from NRL, is also considering to adjust the prices. They said
the decision is likely to be taken in two to three days.
forex reserves $640 million
Pakistan's liquid foreign exchange reserves fell to
$1.122bn on Sept 9 from $1.220bn on Aug 31, according to the State
Bank statistics released on Thursday. SBP statistics show that on Sept
9 Pakistan had $951m worth of approved forex reserves and $171m worth
of balances held abroad in cash and short term securities.
The total reserves of $1.122bn also include more
than $482m worth of foreign currency deposits of banks placed with the
SBP. This means that net reserves have fallen to $640m. Senior bankers
said the reserves fell because of huge debt payments. Pakistan has to
make total debt payment of more than $300m during this month.
The price of poultry meat has become equivalent to
the price of beef in the markets as price of broiler live bird fell to
Rs50 per kg on Thursday, showing a fall of Rs8 per kg during the last
The State Bank lowered the yield by 10 basis points
on four-week repo of treasury bills to 7.90% on Friday sending a
signal to the market that there was no immediate hiking up of interest
rates on the cards. SBP sold Rs 3.30bn worth of T-bills in four-week
repo at 7.90% down 10 basis points of the previous cut-off of 8%. It
also sold at an open market operation Rs 1.20bn worth of TBs in
two-week repo at 7.75% and Rs 250m of T bills in one week repo at
may meet year's deficit
It is unlikely that the IMF will deny
"oxygen" to Pakistan but the worry now is about the size and
form of the financial package.
Sources said the Fund is expected to provide
short-term credit facility and debt relief by Paris Club is to be of
similar tenure. Apparently, IMF wants to keep Islamabad under pressure
so that it does not drag its feet on stipulated reforms, they added.
to get US$25m
The Islamic Development Bank (IDB) on Monday made
loans worth more than 278 million dollars for development projects in
its member countries, it announced in a statement. Pakistan received
25 million to buy crude oil and refined oil products from other IDB
A group of US-based investors, led by the former
caretaker prime minister Moeen Qureshi announced on Saturday the
setting up of a Venture Capital Fund for Technology Development in
Pakistan which aimed to raise $50 million once it was registered with
the US Securities department.
Mr Shahid Javed Burki, former World Bank official
would be the president and chief executive officer and Dr Nasim Ashraf
would be part of the three-man team heading the fund.
Pakistan Machine Tool Factory — an arm of the
State Engineering Corporation — has recorded a pre-tax profit of
Rs57 million during 1999-2000, official sources said on Saturday.
to suffer Rs100m deficit
The rise in furnace oil prices will further
deteriorate the financial health of Karachi Electric Supply
Corporation (KESC), adding a deficit of over Rs 100 million per month.
In case Rs 600 per metric ton rises in furnace oil,
the monthly deficit touches to Rs72m per month and in case of Rs
1,000-1,100 per metric, the deficit soars to Rs 150 million per month,
said a KESC spokesman after working out the impact of furnace oil