July 02 -
SBP buys $2 billion from kerb in 2000-01
The State Bank has so far purchased about $2
billion from open currency market during this fiscal year and the
amount may rise further if SBP buying continues till the year-end,
sources close to SBP said.
In the last fiscal year, the central bank had
bought $1.6 billion from kerb. Latest official figures are not
available but SBP had admitted in its third quarterly report that it
had purchased $1.56 billion between July 2000-March 2001 from the open
market to meet balance of payment requirements. The sources close to
SBP said the State Bank has bought over $400 million more from the
open market so far during this quarter that lifted its total purchase
to a little less than $2 billion.
SBP had to buy some $400 million during this
quarter from kerb despite major foreign exchange inflows including
that of $350 million World Bank structural adjustment credit to meet a
yawning gap in the balance of payment. The balance of payment gaps
become wider normally at the end of every quarter — and more
prominently at the end of the last quarter — due to huge official
and private debt payments. Throughout this fiscal year there had been
another factor responsible for widening the balance of payment gap
i.e. higher than normal oil import bills due to increased prices of
POL products in international markets.
What else compelled SBP to keep buying dollars from
kerb was the fact that it was building foreign exchange reserves to
meet an IMF target. Under the $596 million IMF standby credit SBP is
to have $1.6 billion liquid reserves at the end of June to meet the
target of its net foreign assets.
As on June 16 the State Bank had liquid forex
reserves worth $1.7 billion but the amount also included about $350
million of banks placed with SBP as cash reserves on their foreign
currency deposits. In other words SBP had net forex reserves of $1.35
billion on June 16. The sources say increasing this amount to $1.6
billion by end-June would have been difficult had SBP not been buying
dollars from kerb. But it is not the kerb purchases alone that the
State Bank is relying on to keep the reserves at the desired level.
SBP borrows $105m from banks thru swap
The State Bank had to borrow more than $100 million
from some local and foreign banks during this month to meet an IMF
Senior bankers said, SBP borrowed about $105
million from banks under dollar-rupee swap arrangement for one year
adding that the banks got one-year T-bills against this amount instead
of cash in rupees. They said the central bank issued the bills at
12.93 per cent to the banks.
This brings the total swap, the central bank has
contracted in this fiscal year to $316 million.
Slight upward change in POL prices seen
Refinery operators and oil marketing companies (OMCs)
forecast a slight upward price adjustment in petroleum products from
July 1 in view of rising trend in global oil prices and weakening of
the rupee against the dollar.
Several senior officials in refineries and OMCs,
hinted at "a slight increase" in petroleum prices from July
1 but they did not reveal the exact percentage.
Some executives were of the view that the price
hike in petroleum products will remain below five per cent.
Officials in the OMCs as well as refinery operators
will meet at the office of Oil Companies Advisory Committee (OCAC) to
announce the new prices of petroleum products effective from July
MCB declares 7.5pc dividend
Muslim Commercial Bank (MCB) on Thursday announced
a cash dividend of 7.5 per cent and 20 per cent bonus shares to the
bank shareholders for the year 2000.
The decision was taken at the 53rd Annual General
Meeting of the Muslim Commercial Bank Ltd. Meeting that in view of
Operating Profit of Rs. 2.48 billion for the year 2000, which was 58
per cent higher than Operating Profit of the year 1999, 10 per cent
Interim Bonus, 10 per cent Final Bonus and 7.5 per cent Cash Dividend
be paid out to the shareholders.
The rupee on Thursday shed five paisa more against
the US dollar in inter-bank market to close at 63.90/ 63.95 for ready
buying and selling. Senior bankers said the rupee fell, mainly due to
oil import bill payment by a foreign bank that increased the demand
for dollars. They said some deals were struck at Rs 64.00/64.05 per
dollar in value.
Gold touches all time high
Gold prices touched all time high at Rs5,898 per 10
grams on Wednesday, breaking its previous record of Rs 5,847 per 10
grams on June 9.
Bullion dealers said that the price of ten tola bar
(600 grams) also shot up to Rs68,700 from Rs67,400.
Wapda to float bonds
Wapda will issue Rs6 billion bonds to complete 1450
MW Ghazi Barotha Hydro Power Project (GBHP), which is already 18
months behind schedule.
Domestic debt increased
The government accumulated both domestic and
foreign currency debt at a much faster pace than projected in fiscal
year 2000-01. According to the budget documents for fiscal 2001-02
domestic permanent debt rose by Rs31 billion in 2000-01 against
original estimate of Rs12 billion.
Maple Leaf merger
The Maple Leaf Electric Company will soon be merged
with Kohinoor Textiles and Maple Leaf Cement Factory under the scheme
of arrangement approved by the Lahore Higher Court, recently.
Under the approved Swap ratio, 100 shares of Maple
Leaf Electric, are equal to 49.7 shares of Maple Leaf Cement and 50.3
shares of Kohinoor Textiles Mills. Book closure for the exchange of
shares will commence from June 29.