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Oct 01 - 07, 2001

Japan agrees to reschedule $550m debts

Seiken Sugiura, the visiting Japanese Senior Vice Minister for Foreign Affairs said on Thursday that Japan would reschedule a debt of 550 million dollars besides providing $40 million emergency economic assistance.

Addressing a press conference at a local hotel, the Japanese Minister said that Japan would also cooperate with Pakistan for getting economic assistance from IMF and World Bank.

Seiken further said that he had also assured Pakistani Government that Japan would consider the issue of nuclear related sanctions imposed after May 1998 nuclear tests by Pakistan.

"Pakistan has taken up the issue of nuclear related sanctions with us and I told them that I would convey the concern to my government and we will reconsider it," he said.

He said the purpose of his visit was to convey the special message of Japanese Prime Minister to President General Pervez Musharraf and to appreciate Pakistan's stand in fight against terrorism.

"We reassured that Japan supports Pakistan's decision to stand with the world in the fight against terrorism. Japan feels that it is very important to support Pakistan as it has decided to stand with world community in very difficult circumstances."

The Japanese minister said he had discussed with the president, the foreign minister and finance minister the issues relating to economic cooperation, trade and investment besides other important bilateral matters.

To a question, the visiting minister said the finance minister told him that Pakistan's real problem was with nuclear related sanctions. "I informed him that we are carrying back to Japan this issue and we will consider it."

IMF okays $596m Pakistan loan

The International Monetary Fund (IMF) on Wednesday approved the final tranche of Pakistan's $596 million stand-by loan with the fund, IMF sources said.

The third and final tranche is around $130 million. "It went through without any problem," said one source present at the meeting of the IMF's decision-making executive board.

He added that while Pakistan is in favour with the international community because of its cooperation with the United States in the wake of the Sept 11 attacks on New York and the Pentagon, the country has also "been doing rather well" in sticking to its IMF-backed economic programme.

Pakistan is expected to be received warmly if it seeks further financial aid from global lenders.

$853m debt relief pacts concluded

Pakistan has concluded $853.7 million debt rescheduling accords with 13 countries including rescheduling of $379 million loan by the United States.

Another debt rescheduling pact with Japan worth $616 million is expected to be signed shortly as both sides have completed almost all formalities, official sources told APP on Tuesday.

Pakistan and Japan will ink the debt rescheduling agreement soon after the approval by the Japanese cabinet as a last formality, the sources said. Two $7 million debt rescheduling agreements with non-Paris club member states Saudi Arabia and Czech Republic have also been signed.

Japan, Korea, Sweden, Russia, Belgium and Canada have to sign $892 million rescheduling treaties with Pakistan under Paris Club agreement.

Three agreements with non-Paris Club states UAE, Kuwait and Libya worth $17 million are also to be signed with Pakistan under Club agreement.

Banks recover Rs2bn

In the first two months of this fiscal year all banks recovered Rs2 billion worth of defaulted loans. The recovery includes cash recovery and restructuring. The break-up of the two is not known.

The three state-run banks namely National Bank, Habib Bank and United Bank made the bulk of this recovery i.e. Rs1.25 billion between July-August 2001.

According to the latest State Bank figures, loan defaults of Rs1 million and above of all commercial banks fell from Rs121.134 billion on June 30, 2001 to around Rs116.924 billion on August 31-showing a decline of Rs4.2 billion. This change means part of the defaults were restructured or recovered. Thus the Rs2 billion recovery is included in it.

SBP injects Rs5.2bn

The State Bank injected Rs5.2 billion in the inter-bank money market at a special open market operation.

The central bank made the injection for one week through reverse repo of treasury bills at 10.25 per cent. This OMO had generated offers worth Rs10.1 billion of which SBP accepted Rs5.2 billion and scrapped the same. This was the second injection of liquidity within this week. Earlier on Tuesday the State Bank had pumped in Rs15.925 billion also for a week at 11 per cent.

Banks agree

The chief executive of Crescent Investment Bank Nessar Ahmad said on Wednesday five major banks had agreed to buy its equity holding of Rs1.6-Rs1.7 billion. The banks are: (i) National Bank (ii) Habib Bank (iii) United Bank (iv) Muslim Commercial Bank and (v) Allied Bank.

Rupee makes swift recovery

The US dollar after scaling a new height at Rs 64.50 in the inter-bank market slipped silently to Rs64.20/64.25 on Monday.

Senior bankers said the dollar shot up to Rs64.50 as a large European bank with a long history of presence in Pakistan bought about $10 million for a customer. This caused serious concern at Exchange & Debt Management department of the State Bank whose officials persuaded some banks to sell a couple of millions of dollars: The banks did this and the dollar started sliding and finished at Rs 64.20/Rs 64.25. The bankers said a major state-run bank that tops the list of the banks preparing for privatization became the cock of the walk in selling dollars.