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FINANCE

Jan 24 - 30, 2000

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SBP injects

The State Bank on Thursday injected roughly Rs 24 billion for two weeks to one month in a liquidity-starved interbank market.

SBP said it bought Rs 4.785 billion worth of two-week treasury bills at 7 per cent and Rs 19.2 billion worth of one-month bills at 6.75 per cent.

SBP bought the bills at a two-way open market operation. Banks had offered Rs 16.285 billion worth of TBs for sale out of which SBP purchased TBs worth Rs 23.985 billion and rejected the rest. SBP did not sell any T-bills though the two-way OMO had attracted Rs 2.4 billion worth of bids as well.

$50m for payphone

The Telecard has arranged 50 million dollar suppliers' credit for its Wireless Local Loop (WLL) payphone project, a company official said. The company has signed an agreement with Motorola Corporation of the United States, which will provide credit for five years and Code Division Multiple Access (CDMA) equipments.

Lending rates

Muslim Commercial and Allied Bank have cut their internal lending and borrowing rates. This will drive their branches to lend more to the customers instead of placing surplus funds with their respective treasuries.

Two other major banks i.e. National Bank and United Bank are expected to make similar move before the month-end. The third one i.e. Habib Bank has a system of adjusting internal lending and borrowing rates every month: as such its current rates at 11 and 11.25 per cent do not need an immediate revision.

Centre releases Rs656m to NWFP

The federal government has released Rs 656 million to the NWFP government as its share from the net profits through the earnings from hydel power, official sources said.

The release of provincial share from this source comes after a gap of over three months. Last time the provincial government received its share from this source was the first week of October.

SBP eases curb on dividend remittances

The State Bank on Tuesday allowed remittance of dividend to non-resident shareholders and eased off some other restrictions on foreign exchange outflow imposed in 1998.

A SBP circular (FE no 1) issued to banks said, remittance of dividend to non-resident shareholders had been allowed but such remittance would require documentation with the State Bank.

The circular said remittance on account of principal and interest on the basis of repayment schedules registered with SBP had also been allowed with immediate effect.

But it said, the permission was meant for only private sector excluding those organisations that are owned 51% or more by the government. The circular said, remittances on accoumt of royalty and technical fee admissible under foreign exchange rules are also allowed.

SBP said remittance of instalments of principal and interest of foreign currency loans by Pakistani firms and companies are also permitted. But the circular made it clear that remittances of this nature would be made on the basis of repayment schedules registered with SBP. It said remittance of principal amd interest on account of foreign currency loans obtained by foreign controlled companies for working capital requirements were also allowed.

SBP has also restored the facility of imports without opening of letters of credit of those commodities that are not subject to any cash margin requirements. This facility was withdrawn in July '98. Currently industrial raw materials; machinery and its components and about a dozen essential items including wheat and petroleum products enjoy exemption from cash margin requirements.

China agrees to reschedule Pakistan loans

China on Monday agreed to reschedule its loans to Pakistan which were due up to Dec 1999.

Chinese Premier Zhu Rongji made this decision at the formal talks with Chief Executive Gen Pervez Musharraf at the Great Hall.

The Chief Executive appreciated the "spontaneous decision" of Chinese Premier to postpone these loans. These loans would be rescheduled for payment between 2010 and 2019, official said.

Pakistan debt rescheduled by Belgium

Belgium consolidated and rescheduled Pakistan's $ 6.6 million debt (257.550 million Belgian franc) for over 10 years.

An agreement in this regard was signed between the two governments by Igor Haustrate on behalf of Belgium and Javed Akram, Secretary, Economic Affairs Division, on behalf of Pakistan.

Under the pact, debt servicing of BF 257.550 minion, due during the period from July 1,1998, to Dec 31, 2000, on loans contracted up to Sept 30,1997, has been consolidated and rescheduled for repayment in 20 semi-annual instalments, commencing from July 1, 2010.

Shaukat asks US team for investment

The four-member US Senate delegation held a detailed meeting with Finance Minister Shaukat Aziz and was told that there existed a better environment in Pakistan for foreign investment.

According to informed sources, the finance minister urged the delegation, led by minority leader Senator Tom Daschle, to help attract foreign investment, specially that of the United States, as the law and order situation had greatly improved in the country.

He said the factor of foreign investment in achieving a good GDP growth was very important.

NBP likely to declare profit

The country's premier financial institution, National Bank of Pakistan, is expected to declare a record gross profit in the range of Rs 6 billion, which is the highest-ever by a corporate entity in the country, as the bank's deposits soared to Rs 295 billion by end-December 1999.

China assures substantial investment

China has assured to make substantial investment in Pakistan, says the minister for finance Shaukat Aziz.

Shaukat who accompanied the Chief Executive to China told that China had assured to provide all kinds of financial and technical assistance to Pakistan. 'One of the major things is that the Chinese are coming in a big way to invest in Pakistan', he added.