May 21 -
Jun 03, 2001
Accord with six donors this month: Rescheduling
Pakistan will ink rescheduling loan accords with Spain,
Austria, Italy, Germany, France and UK this month. Pakistan has already signed
two agreements with Finland and Norway last month while another agreement with
Denmark was inked last week under rescheduling of loan, official sources said on
All requirements of loan treaties with Canada have also been
completed, the sources said.
The process of signing rescheduling agreements with eighteen
donor countries would be completed by August this year, as the Paris Club has
allowed rescheduling of bilateral loans worth $ 1.8 billion for nine months (Jan
to Sept 2001).
Process for the reconciliation of loan figures has already
commenced with the donor states, maintained the sources adding, the rescheduling
of loans in fact is "consolidated rescheduling" for nineteen months
including ten months (from March 1, to December 31, 2000).
The sources said that the reconciliation process with five
donor countries had been completed. Rescheduling of $ 1.8 billion debt will
continue to help improve country's cash flow besides posting cushion against the
loan repayment till September this year.
Pakistan, the sources said, will start repayment of
rescheduled loans from October next, depending on their maturity.
The Official Development Assistance (ODA) under the
rescheduling agreements is repayable in 20 years with ten years grace period.
While repayment period of commercial loans would be 18 years
with three years grace period under rescheduling treaties, the sources
State Bank mops up Rs 9.1bn
The State Bank on Thursday sucked in Rs9.1 billion of excess
liquidity from the inter-bank market in two week and six week repos of treasury
bills at 11 and 11.24 per cent.
SBP said it raised Rs6.1 billion through two-week repo of T-
bills and Rs3 billion through six-week repo. Bankers said the yield on two-week
repo of T-bills was higher by 50 basis points adding that SBP had raised the
yield to suck in maximum excess liquidity from the market to lend some stability
to the rupee.
Bankers said the yield on six-week repo was also higher than
expected. SBP had last enhanced the yield on T-bills repo in its open market
operation on March 29. It had raised the yield on two week repo by 1.25 and 1.75
per cent to 10.5 and 11.5 per cent.
Government meets bank borrowing target
The government has met the target set for its net borrowing
from banks two months before the end of the fiscal year and fiscal managers say
chances for a reversal in the trend are slim.
Senior bankers said net government bank borrowing that stood
at Rs18 billion at the end of the first week of April totalled minus Rs18
billion by the end of the month. In other words the government retired Rs36
billion of net bank credit within three weeks. Under the $596 million IMF
standby credit programme the government is to keep its net bank borrowing at
Rs14.5 billion at the end of the current fiscal year in June.
Bankers said gross bank borrowing in the first 10 months of
this fiscal year stood at Rs48 billion but since the government placed Rs66
billion in its special debt repayment account its net bank borrowing fell to
minus Rs18 billion by end of April.
Rupee falls sharply
The rupee on Thursday fell sharply against the US dollar in
inter-bank market as some local and foreign banks bought $15-$20 million to meet
their customer's demand.
Bankers said the rupee closed at 62.52/62.55 to a dollar down
18 paisa overnight: On Wednesday the rupee had closed at 62.32/ 62.37 for spot
buying and selling against the dollar.
So far this week the rupee has lost about 1.3 per cent of its
value against the greenback in the inter-bank market.
Reserves shoot up
Pakistan's liquid foreign exchange reserves shot up to about
$2.298 billion on May 19 from $2.185 billion a week ago. This means a huge
build-up of $112 million in the forex reserves within a week.
According to a State Bank statement, total reserves included
$1.230 billion held by the central bank and $1.067 billion held by all other
banks. On May 12 the State Bank had liquid foreign exchange reserves worth
$1.136 billion, whereas all other banks combined had $1.049 billion.
Mari Gas Field
The Economic Coordination Committee (ECC) of Cabinet has
allowed Mari Gas Company Limited a 30 per cent Rate of Return on shareholders'
funds, up from the current 22.5 per cent, and the company has also been
permitted to generate $20 million per annum for exploration outside the Mari Gas
FSA okays HBL-ABL subsidiary
The Financial Services Authority (FSA) in the UK has approved
the setting up of a subsidiary through merger of Habib Bank and Allied Bank
operations. Sources said on Monday that the subsidiary would be a private
limited company with a paid-up capital of 25 million pounds. The company,
incorporated in the UK, would have 90.5 per cent HBL equity and 9.5 per cent ABL
EFU Life earns
The Board of Directors of EFU Life Insurance Limited has
approved the annual accounts for the year ended December 31, 2000 and passed
over dividend, reflecting Rs 15.118 million profit for the year. According to
the results, however, a sum of Rs 41.443 million was brought forward from last
year, reducing the loss carried forward to Rs 26.325 million.
Blueprint for co-financing
Pakistan is targeting to have $29 billion strategic
investment partnership with friendly countries like China by the year 2010 in
three important sectors - energy, steel and engineering and textile.
This includes $15 billion additional investment through co-
financing and co-manufacturing in the energy sector, particularly power
generation, $8 billion in steel and engineering sector and $6 billion in the
textile sector, a blueprint titled "Strategic Sectors for Investment"
prepared by the federal government early this month, reveals.