Oct 02 -
Govt borrows Rs37 billion in 2 months
The government had to borrow Rs 37 billion from the banking
system in the first two months of this fiscal year to bridge a short term gap
between income and expenditure.
Senior bankers said the government made a gross borrowing of
Rs 43 billion during July-Aug 2000. But it also placed six billion rupees in its
debt retirement account in the same time thus reducing its net borrowing from
the banking system to Rs 37 billion.
The government keeps the rupee equivalent of foreign debts in
its debt retirement account to ensure immediate conversion of this amount into
foreign exchange when a debt payment falls due.
Under the annual credit plan the government is supposed to
retire Rs 2.2 billion worth of bank credit in the current fiscal year instead of
making any fresh borrowing.
In fiscal '99-00 the government had made a net borrowing of
Rs 40 billion. That was a big slippage because under the credit plan the
government was supposed to retire Rs 15 billion credit instead of borrowing from
banks or the State Bank of Pakistan.
A net borrowing of Rs 37 billion in the first two months of
2000-01 is also very unusual because in the same period of last fiscal year the
net government borrowing was at Rs 5.6 billion.
Bankers say it is difficult to ascertain the reasons for this
heavy borrowing. As the target is set for a year the government keeps borrowing
as much amount as required on given times and tries to bring total borrowings
within limits at the year-end.
In a sharp contrast to heavy government borrowings the private sector retired
Rs 12.2 billion worth of bank credit in the first two months of this fiscal
year. In the same period of last fiscal year the private sector had retired Rs
20.10 billion worth of bank credit. The reason for this is simple. In Pakistan
private sector credit is seasonal in nature. Normally the private sector retires
credit in six months from April to September of each year as these months are
leaner in agricultural productivity.
The rupee shed 18 paisa more in the inter-bank market on
Thursday and closed at 58.30 against the dollar down from 58.12 on Wednesday.
Bankers said the rupee fell on debt payments of at least $15
million. They said the rupee at one stage fell to 58.40 against the dollar for
tomorrow value but after a while recovered ten paisa and closed at 58.30.
They said forward premium on one month shot up to 75 paisa
over the spot price at one stage but closed at 62-68 paisa up from 48 paisa on
Wednesday. Six-month premium oscillated between Rs2.40 and Rs2.60 over the spot
price and that of three months remained unchanged at the last level of Rs1.30.
In the kerb market the rupee fell 60.50 and 60.70 for spot
buying and selling down from 60.35 and 60.45 on Wednesday. Leading currency
dealers said the trend in the inter-bank market mirrored in the kerb market.
Reserves inch up
Pakistan's liquid foreign exchange reserves rose nominally to
$1.065bn on Sept 23 from $1.01bn on Sept 16, according to the statistics
released by the SBP on Thursday.
The statistics show that on Sept 23 Pakistan had $861m worth
of approved foreign exchange reserves and $204m worth of balances held abroad in
cash and short term securities. The total reserves of $1.065bn include some
$430m worth of fresh foreign currency deposits of banks placed with the SBP. Net
foreign exchange reserves stood at $635m on Sept 23.
Gold up by Rs100 per 10 grams
Gold prices climbed to a record high at Rs 5,380 per 10 grams
on Thursday as compared to Rs 5,280 per 10 grams due to rising global prices
coupled with frequent devaluation of rupee against dollar.
The international market rose to $277.65 per ounce on
Thursday as compared to $272 per ounce the other day.
Loan default up
Loan defaults rose by Rs 5.0 billion in the last fiscal year
despite cash recoveries of about Rs 10 billion in a month-long drive against
defaulters launched soon after the induction of the present government.
Sources close to State Bank said total non-performing loans
of all banks and development financial institutions went up by Rs 27.5 billion
in fiscal year 1999-2000.
They said NPL went up to Rs 239.5 billion on June 30, 2000
from Rs 212 billion on June 30, 1999. A loan is categorized as non-performing
when it becomes overdue by 90 days or more. The total NPL of Rs 239.5 billion
also included Rs148 billion defaulted loans of one million rupees and above.
IFC will offer $100m through PTEF
The International Finance Commission (IFC), will offer $100
million, to help local companies regain access to international markets through
the Pakistan Trade Enhancement Facility.
The project will provide a facility to guarantee documentary
credits, originated by selected commercial banks in Pakistan.
PSO, Shell, Caltex
Pakistan State Oil (PSO) on Wednesday increased the fuel oil
cost by 7.4 per cent or Rs861 per metric tons to Rs12,465pmt (inclusive of sales
tax) from Rs11,604pmt.
Shell Pakistan Ltd (SPL) and Caltex Pakistan (CP) have raised
the furnace oil prices by Rs 506 per metric ton and Rs 750.75 per metric ton on
The Water and Power Development Authority is going to launch
the 8th issue of its bonds worth Rs6.7 billion on Thursday through National Bank
branches in Karachi, Lahore and Islamabad. The five-year bond carries a fixed
mark-up of 12.5 per cent for the first year and 2 per cent above the SBP
discount rate for the remaining years. The floor price would be 12.5 per cent
and the cap would be at 16.5 per cent.
Khadim Ali Shah Bukhari & Co Limited (KASB), unveiled
financial figures for the year ended June 30, 2000 on Monday, posting 28 per
cent growth in operating profit to Rs121.9 million, from a year ago operating
earnings at Rs95.1m.