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Dec 04 - 10, 2000

IMF approves $596m loan

The IMF's board of governors on Wednesday approved the long-awaited $596 million standby facility for Pakistan for the next 10 months.

However, the board linked the release of the last three tranches of the loan to the meeting of performance criteria on major issues such as revenues, exports and foreign exchange reserves.

"The first upfront $200 million tranche is likely to be shifted into the State Bank's account," Finance Minister Shaukat Aziz told a news conference on Thursday.

For the approval of the remaining three installments, he said, the board would meet in March, in May and later in September next year. "There has been the problem of credibility that is why we have to face regular monitoring of our economic situation by the Fund officials for certain funding."

The minister hoped that the approval of the IMF programme would pave the way for resumption of assistance by the WB, the ADB, and restructuring of loans by the Paris Club.

The important thing, he pointed out, was that Pakistan would start qualifying for loans from other foreign banking sources and more importantly, he added, "we now expect flow of foreign investment".

In reply to a question, he said there were no political conditionalities attached to the new loan under the Standby Arrangement. "There is no non-economic conditionality in this 10- month new programme with the IMF."

He claimed that all members of the IMF board had supported the resumption of assistance to Pakistan except the United States. "The US official in the board abstained because the law of the United States does not permit funding to Pakistan under the present circumstances".

The finance minister termed the approval of the loan a milestone in the effort of the government to rebuild the economy.

ADB to provide $52 million

The Asian Development Bank (ADB) has decided to provide $52 million mainly to help farm women living in rainy areas of Pakistan.

According to an announcement made on Wednesday by the local ADB office, women will make up to 40 per cent of the beneficiaries of a project to help farming families in rainy areas through $52 million concessional lending.

The project is a continuation of a previous project completed in 2000. The new project will raise incomes by providing a range of measures to increase agricultural productivity and by promoting livelihood enterprises. It will also improve life for rural communities through social services such as health and education by upgrading village infrastructure, including irrigation, rural access, roads and water supply.

Altogether an estimated 830,000 people 80 per cent of whom subsist on 50 cents a day or less are expected to gain from the NWFP Barani Area Development Project.

Liquid forex reserves shoot up

The State Bank received on Thursday $192 million in its account as the first tranche of a $596 million 10-month IMF standby credit that raised liquid foreign exchange reserves of Pakistan to $1.336 billion.

"We have received 150 million SDR (special drawing rights) or $192 million in our account," chief spokesman for SBP told. The SBP received the amount in its New York account immediately after the IMF board of executive directors approved in Washington $596 million standby loan for Pakistan.

The inflow of the IMF money boosted foreign exchange reserves to $1.336 billion on November 30 up from $1.129 billion about a week ago. The amount also included $481.7 million private foreign currency deposits of banks placed with the SBP as on November 30.

Additional funding

World Bank has expressed willingness to offer additional funds for the implementation of tax reforms, said Finance Minister Shaukat Aziz on Thursday.

"We have been told by vice-president Mieko Nishimizu that her bank is interested in extending additional funds for improving tax administration in Pakistan," he told reporters at a news conference.

Pakistan, he pointed out, had made a formal request to the World Bank for additional funds for the financial restructuring of the CBR. Unsure about the size of the funding, the minister stressed that the WB's lending over the issue would be very important.

PSO cuts fuel oil price

Pakistan State Oil has decided to further reduce the price of light sulphur fuel oil (LSFO) and high sulphur fuel oil (HSFO) by Rs 972 per metric tons and Rs 152 per metric tons respectively.

Fecto Cement

Fecto Cement Limited presented accounts for the year ended June 30, 2000, reporting after tax profit at Rs83.4 million on sales valued at Rs1,208 million. Gross profit at Rs237.3 million, stood almost twice of Rs118.6 million earned in 1999.

PARCO

Pak-Arab Refinery Limited (PARCO) has declared a dividend of 36 per cent, amounting to Rs778 million for the year ended June 30, 2000 despite making substantial investments on its recently completed mid-country refinery project.

PTCL

Pakistan Telecommunication Company Limited (PTCL), on Tuesday announced 22.5 per cent cash dividend for the year ended June 30, 2000.

Plastobag

Plastobag and first Paramount Modaraba has issued Bonus Shares in the proportion of 15 shares for every 100 shares held (15%). According to the results, gross profit of Rs 27.418 million against Rs 48.413 million of previous year.

Shell

Shell Pakistan (SPL) has decided to increase the furnace oil prices by Rs115 per metric ton to Rs12,552.25 pmt from Rs 12,437.25.