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Jan 22 - 28, 2001

SBP resells dollar to banks

The State Bank of Pakistan (SBP) has so far sold back to banks about 50 per cent of the total $255 million, it had purchased from them in one-month swaps against the rupee last month. The SBP had swapped $255 million for rupees with banks between December 13-22 to keep the market liquid at the year-end.

Senior bankers say the SBP will sell back the remaining amount of foreign exchange in a couple of days, according to the maturity schedule of the swaps.

Bankers say the maturity of about $120 million worth of swaps in past few days has made the rupee stronger against the dollar. "Further maturity of $135 million swaps in next few days may add more strength to the rupee...and keep it up amidst oil payments," said a bank treasurer.

Bankers said the SBP had started footing import bills of previous quarter (October-December 2000) on its own without asking banks to pay part of the bills through purchases from the open market. They said SBP was not financing oil import bills even through its own kerb purchases.

"This time SBP has been making oil payments on its own. They have not involved us," said a local banker. In the past, the State Bank was financing part of oil import bills leaving it upon oil marketing companies to pay the remaining part through open market purchases of dollars. Oil marketing companies (OMCs) used to purchase dollars from the open market through banks. And at times the central bank would simply buy dollars from the open market for footing large import bills.

Bankers close to SBP say the central bank has not been making heavy dollar buyings from the open market only because the time is not ripe. "Lately they have not made big buyings," confirmed a leading money changer.

So far this month, the rupee has lost 70 paisa against the US dollar in kerb as the greenback is in demand among those overseas Pakistanis, who are returning after celebrating Eid in Pakistan.

NBP asks govt to pay $0.268m

The National Bank of Pakistan has asked the government to immediately pay $268,000 to a US shipping company, which had recently won a case against Pakistan, so that the food accounts frozen by the US government on court orders are restored.

Official sources told on Tuesday that the National Bank of Pakistan (NBP) Karachi management had contacted the concerned ministry and asked them to arrange payment to the company so that the accounts were unfrozen.

An inquiry into the circumstances which led to the freezing of accounts in the United States last week had held the food wing of the agriculture ministry responsible for making "deliberate" payment of $268,000 to another shipping company instead of paying the money to the contracting shipping firm.

Pakistan bank accounts were frozen by the US government after Islamabad failed to pay $268,000 to the shipping company, as directed by a US District Court in Washington.

Interest to invest $50m in LPG shown

Minister of Petroleum and Natural Resources, Usman Aminuddin has said that a number of foreign investors have shown keen interest in investing about $50m in liquefied petroleum gas (LPG) extraction plant.

Reviewing the performance of Sui Southern Gas Company (SSGC) on Thursday, he directed that the gas supply from Zamzama and Miano gas fields must be available as projected in March and July this year respectively, says a press release.

He also directed the project installation of LPG extraction plant at Hyderabad and added it should be expedited to complete within two and a half years.

Rupee up

The rupee gained 20 paisa against a US dollar in the inter-bank market on Wednesday as corporates stayed away from greenback buyings. Senior bankers said the rupee closed around 59.15/59.25 to a dollar against the previous close of 59.35/59.45 for spot buying and selling.

Gold price declines

Fluctuation in the international bullion market continued as on Wednesday downslide in the price of gold in local bullion market was registered at Rs8 per 10 gram. The traders in the domestic bullion market adjusted the gold price in accordance with the changes in the global bullion market. The new price was registered at Rs 5290 from Rs 5298, indicating the decline of Rs8.

Shell reduces furnace oil rate

Shell Pakistan Limited (SPL) has slashed the furnace oil prices by Rs802.70 per metric tons to Rs9,579.50pmt from Rs10,382.20pmt on Tuesday.

An official in the company said the prices have been reduced due to cut in rates by the local refineries.

Shell had cut the furnace oil prices on January 2 to Rs10,382.20pmt from Rs11,337.85pmt.

PSO cuts fuel oil prices

The Pakistan State Oil (PSO) has slashed the prices of high sulphur fuel oil (HSFO) and light sulphur oil prices by eight per cent and 1.5 per cent, respectively.

The new prices will be effective from January 16, says a PSO spokesman on Monday. The selling price of HSFO has been reduced to Rs9,533 per metric ton from Rs10,354 pmt. The LSFO will now be available at Rs12,923 pmt as compared to Rs13,122 pmt.

Is ABL re-nationalized?

Has the Allied Bank Limited (ABL) been re-nationalised? This is the question that is now being hotly debated in the banking circles following the reports that Habib Bank Limited has been persuaded to buy back about two per cent shares in ABL from its employees to raise government's stake from 49 per cent to 51 per cent. "Effectively it means that the Government has added the privately-privatised ABL again into its fold of nationalised banks", stated a seasoned banker.