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
"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
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
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.
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
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.