$596m SBA to end in Sept
The IMF standby agreement or 10-month standby
credit programme currently in operation in Pakistan would end in
September, and any extension in SBA or its conversion into a long term
programme seems out of question.
Sources close to ministry of finance said that the
IMF review mission due in Islamabad in mid-August would evaluate
Pakistan's economic performance in fiscal 2000-01 besides holding
talks on poverty reduction and growth facility.
They said there are no indications about Pakistan
seeking an extension in SBA or its conversion into PRGF adding the IMF
is less likely to weigh such prospects. Since Pakistan has met most of
key performance criteria set for the last quarter of fiscal 2000-01
the mission should not have difficulty in recommending the release of
fourth tranche out of the $596 million standby credit. Pakistan has so
far received three tranches worth $457 million and the release of the
fourth one is linked to its meeting the performance criteria set for
April-June 2001. The previous three tranches were also released only
after Pakistan had met quarterly performance criteria.
The sources said the five-member IMF mission would
split into two groups: one would review the economic performance of
Pakistan in line with the performance criteria attached to SBA, and
the other would hold negotiations on PRGF. But they could not say how
early the fourth tranche would come in.
It will depend on how quickly the mission wraps up
its report and how early the IMF board of directors takes up the
issue. The third tranche was released quite late — in mid-July —
although the IMF mission had visited Pakistan as early as in May to
assess if it has met the performance criteria set for January-March
The sources said since the 10-month SBA approved on
November 30, 2000 is going to expire in September there is naturally
no performance criteria for Pakistan in July-September quarter. But
they made it clear that indicative targets already set for this
quarter would remain in place. If Pakistan meets the same it would
help Islamabad improve its image and pave the way for PRGF.
Remittances cross $1bn mark
Home remittances or the amount of foreign exchange
sent back home by overseas Pakistanis totalled $1.021 billion in
fiscal (July/June) 2000-01 crossing the one billion dollars mark after
In 1998-99 home remittances had fallen to $875
million showing the loss of confidence of overseas Pakistanis in the
country's banking system. Pakistan had frozen $11 billion worth of
foreign currency deposits most of which belonged to overseas
Pakistanis after going nuclear on May 28, 1998 to avoid default on
In 1999-00 the situation improved and home
remittances rose to $913 million — but still below one billion
dollars mark. Before going nuclear Pakistan used to get more than a
billion dollars in home remittances on an average.
Banks, NBFIs to get 2.75pc return in Aug
The State Bank said on Tuesday it would pay banks
and non-bank financial institutions 2.75% annual return in August on
the 20% special cash reserves on their foreign currency deposits. The
return fixed for July was 2.86%.
The State Bank fixes this monthly return on the
basis of the one-month LIBOR (London Inter-Bank Offered Rate) at the
close of the last working day of the previous month. On April 2 this
year, the SBP freed up foreign currency deposits of banks placed with
it, allowing them to use the same in local or international markets.
But it also asked them to keep 25% of their total foreign currency
deposits as cash reserves in foreign currency. The SBP promised to pay
banks and NBFIs a monthly return on 20% special cash reserves, making
it clear that the remaining 5% being mandatory cash reserves would
earn no return.
Forex reserves rise to $3.25bn
Pakistan's liquid foreign exchange reserves rose to
$3.25 billion on July 28 from $3.23 billion on July 21. The SBP said
on Thursday the total reserves included $1.68 billion held by it and
$1.57 billion by all other banks.
20% cut in LPG prices ordered
The government has asked producers and marketing
companies of Liquefied Petroleum Gas (LPG) to reduce prices by at
least 20 per cent immediately, official sources told on Wednesday.
An advice in this respect was given by Secretary,
Petroleum and Natural Resources, M. Abdullah Yousaf at a meeting of
the representatives of LPG producers/oil refineries and marketing
companies with an objective to overcome the surplus LPG production. If
the advice is followed, the LPG prices would come down from existing
Rs230/240 per cylinder to Rs180/190 per cylinder, these sources said.
11 EoIs for NIT shares received
Privatization Commission on Tuesday received eleven
expressions of interest from international and Pakistani parties for
acquiring 58 per cent government shares in National Investment Trust
Limited (NITL) the Asset Management Company of National Investment
Rupee gains 10 paisa in kerb
The rupee gained 10 paisa more to a dollar in the
open currency market on Tuesday. It closed at 66.65/65.85 per US
dollar for spot buying and selling up from 66.80/66.95 per dollar on
Gillette: Gillette Pakistan Limited announced
financial results for the first half of the year to end-June 2001,
posting pre-tax profit of Rs56.8 million.
JSIB: Jahangir Siddiqui Investment Bank (JSIB)
posted 125 per cent growth in profit after tax to Rs45 million for the
year ended June 30, 2001, from a year ago taxed profit at Rs20
AHSL: Arif Habib Securities Limited (AHSL) —
the stock brokerage firm — posted 42 per cent drop in profit after
tax to Rs133 million for the year ended June 30, 2001, from a year ago
taxed profit at Rs228 million.
Knoll Pharmaceuticals: Profit after tax at
Knoll Pharmaceuticals Limited for the half year ended June 30, 2001
improved 8 per cent to Rs40m, from Rs37 million for the corresponding
period of last year.